“NORTH-SOUTH” economic divide in the UK have widened up more as a recent study shows that £150 billion of savings accrued by the country over the pandemic are concentrated in the south of England, while large parts of the north and the Midlands are facing an “avalanche” of personal debt.
Highlighting the economic gap which seemed to have widened during pandemic, a recent study by Centre for Cities shows that people in southern England neighbourhoods were typically able to save £12 for every £1 saved by people in poorer neighbourhoods in mostly northern cities and towns.
Lockdown has made spending on non-essential services such as travel, restaurants and entertainment dipped across the country, enabling the accumulation nationally of a £150bn savings cash pile, the study said, adding that this “dividend” is unevenly distributed.
Cities such as Exeter, York and Aldershot were the biggest financial beneficiaries of lockdown, with residents in at least three-quarters of neighbourhoods likely to have boosted savings while Hull, Bradford and Blackburn residents likely to have racked up debts.
As the country’s Covid support package is set to phase out in autumn this year, the economic divide may open up more widely with some parts of the country potentially benefiting from the effects of Covid savings and others may face increased level of debt, The Guardian said in a report on Wednesday (23).
The study also said that people living in poorer neighbourhoods faced a double whammy – not only were they less likely to be able to cut spending over lockdown but were more likely to have lost income as a result of moving on to universal credit or furlough.
Centre for Cities’ chief executive, Andrew Carter said: “The pandemic has left this country more divided than ever. While people in mostly prosperous southern cities and towns have accumulated £150bn of savings, many less affluent people in the north and Midlands will face an avalanche of debt as government support ends later this year.”
“The government is withdrawing financial support far too quickly for people in places that have been hit hard by the pandemic,” Carter said.
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