UK living standards fall despite fastest growth in G7 – business live

Introduction: UK living standards fall despite rise in growth Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. UK living standards fell in the first quarter of the year, even though the economy grew, highlighting the challenge facing Andy Burnham as he pledges to “lift the country’ back up”. New data from the Office for National Statistics this morning shows that real household disposable income per head shrunk by 0.8% in the first quarter of 2026, showing that people were left with less money to spend after taxes. The ONS reports that while pay and income from property rose in the quarter, this was more than wiped out by higher taxes on wealth and income, and a fall in ‘net social contributions’. A chart showing UK disposable income per head Photograph: ONS The households’ saving ratio – which estimates the percentage of disposable income Britons save rather than spend – fell by 0.7 percentage points to 8.9%, driven by a fall in the contribution of non-pension saving. That indicates people had less money to put aside, as rising prices pushed up the cost of living. In better news, the ONS confirmed that the UK economy grew by 0.6% – that is the fastest growth recorded by any G7 country in January, something for Rachel Reeves to cling onto as Burnham weighs up who to appoint as chancellor should be succeed Sir Keir Starmer as PM soon (as appears likely). …