Anthony Breach: Local economic growth is the solution to the ‘cost of living’ crisis
Confidence requires clarity.
Anthony Breach is an associate director at Centre for Cities, where he leads on housing, planning and devolution.
The British public is not happy about the economy, and they’ve got a point. Sluggish growth since the General Election and a slow recovery from the 2008 financial crisis means it has been over two decades since voters saw big improvements to their living standards. The average urban resident saw their disposable income after inflation increase just 2 per cent from 2013 to 2023, compared to 27 per cent from 1998 to 2008.
The Government has pledged that economic growth is its number one mission, but the public’s focus on ‘cost of living’ has pushed Number 10 to promise action on prices, bills, and household costs.
The politics is understandable, but carries risks. Action on the cost of living can only ever be temporary and zero-sum – without growing the economic pie, cutting it up differently just means we all get small slices.
Economic growth is the only way to improve the public’s disposable incomes, as we cannot consume more than what we produce. No party can credibly claim to have an answer to the public’s dissatisfaction with British politics without a plan to increase incomes through growth.
Some of the answers to this problem can be found in the previous period of Conservative government. As Cities Outlook 2026 shows, from 1998 to 2008, average economic and disposable incomes each grew by around 3 per cent each year. From 2013 to 2023, the economy grew by around 2 per cent a year – but disposable incomes only grew by 0.1 per cent per year.
In other words, economic growth and income growth have been disconnected. Reconnecting the economy to living standards and then securing higher economic growth is how to translate Britain’s strengths into better living standards for everyone.
Urban Britain has to be the heart of this strategy, for two reasons.
First, cities are where 54 per cent of the population and 63 per cent of the economy are located. Without a more prosperous urban Britain, there’s no path to either a stronger national economy, or a majority in Parliament.
Second, as Figure 1 from Cities Outlook 2026 shows, some urban areas bucked the national trend and secured significant economic and income growth.
Crucially, these cities were not just the already affluent – places as varied as Warrington, Bristol, and Doncaster offer three lessons to national leaders on what needs to be done to reconnect the economy to living standards.
The first lesson is a strong and diverse private sector.
So-called ‘tradable’ businesses that sell to wider markets – such as software, marketing and manufacturing – bring money into the local economy and support incomes. Barnsley has seen incomes grow twice as fast as the rest of the country, …
Confidence requires clarity.
Anthony Breach is an associate director at Centre for Cities, where he leads on housing, planning and devolution.
The British public is not happy about the economy, and they’ve got a point. Sluggish growth since the General Election and a slow recovery from the 2008 financial crisis means it has been over two decades since voters saw big improvements to their living standards. The average urban resident saw their disposable income after inflation increase just 2 per cent from 2013 to 2023, compared to 27 per cent from 1998 to 2008.
The Government has pledged that economic growth is its number one mission, but the public’s focus on ‘cost of living’ has pushed Number 10 to promise action on prices, bills, and household costs.
The politics is understandable, but carries risks. Action on the cost of living can only ever be temporary and zero-sum – without growing the economic pie, cutting it up differently just means we all get small slices.
Economic growth is the only way to improve the public’s disposable incomes, as we cannot consume more than what we produce. No party can credibly claim to have an answer to the public’s dissatisfaction with British politics without a plan to increase incomes through growth.
Some of the answers to this problem can be found in the previous period of Conservative government. As Cities Outlook 2026 shows, from 1998 to 2008, average economic and disposable incomes each grew by around 3 per cent each year. From 2013 to 2023, the economy grew by around 2 per cent a year – but disposable incomes only grew by 0.1 per cent per year.
In other words, economic growth and income growth have been disconnected. Reconnecting the economy to living standards and then securing higher economic growth is how to translate Britain’s strengths into better living standards for everyone.
Urban Britain has to be the heart of this strategy, for two reasons.
First, cities are where 54 per cent of the population and 63 per cent of the economy are located. Without a more prosperous urban Britain, there’s no path to either a stronger national economy, or a majority in Parliament.
Second, as Figure 1 from Cities Outlook 2026 shows, some urban areas bucked the national trend and secured significant economic and income growth.
Crucially, these cities were not just the already affluent – places as varied as Warrington, Bristol, and Doncaster offer three lessons to national leaders on what needs to be done to reconnect the economy to living standards.
The first lesson is a strong and diverse private sector.
So-called ‘tradable’ businesses that sell to wider markets – such as software, marketing and manufacturing – bring money into the local economy and support incomes. Barnsley has seen incomes grow twice as fast as the rest of the country, …
Anthony Breach: Local economic growth is the solution to the ‘cost of living’ crisis
Confidence requires clarity.
Anthony Breach is an associate director at Centre for Cities, where he leads on housing, planning and devolution.
The British public is not happy about the economy, and they’ve got a point. Sluggish growth since the General Election and a slow recovery from the 2008 financial crisis means it has been over two decades since voters saw big improvements to their living standards. The average urban resident saw their disposable income after inflation increase just 2 per cent from 2013 to 2023, compared to 27 per cent from 1998 to 2008.
The Government has pledged that economic growth is its number one mission, but the public’s focus on ‘cost of living’ has pushed Number 10 to promise action on prices, bills, and household costs.
The politics is understandable, but carries risks. Action on the cost of living can only ever be temporary and zero-sum – without growing the economic pie, cutting it up differently just means we all get small slices.
Economic growth is the only way to improve the public’s disposable incomes, as we cannot consume more than what we produce. No party can credibly claim to have an answer to the public’s dissatisfaction with British politics without a plan to increase incomes through growth.
Some of the answers to this problem can be found in the previous period of Conservative government. As Cities Outlook 2026 shows, from 1998 to 2008, average economic and disposable incomes each grew by around 3 per cent each year. From 2013 to 2023, the economy grew by around 2 per cent a year – but disposable incomes only grew by 0.1 per cent per year.
In other words, economic growth and income growth have been disconnected. Reconnecting the economy to living standards and then securing higher economic growth is how to translate Britain’s strengths into better living standards for everyone.
Urban Britain has to be the heart of this strategy, for two reasons.
First, cities are where 54 per cent of the population and 63 per cent of the economy are located. Without a more prosperous urban Britain, there’s no path to either a stronger national economy, or a majority in Parliament.
Second, as Figure 1 from Cities Outlook 2026 shows, some urban areas bucked the national trend and secured significant economic and income growth.
Crucially, these cities were not just the already affluent – places as varied as Warrington, Bristol, and Doncaster offer three lessons to national leaders on what needs to be done to reconnect the economy to living standards.
The first lesson is a strong and diverse private sector.
So-called ‘tradable’ businesses that sell to wider markets – such as software, marketing and manufacturing – bring money into the local economy and support incomes. Barnsley has seen incomes grow twice as fast as the rest of the country, …
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