The latest data from the Office for National Statistics reveals a 0.8% drop in real household disposable income per head in the UK during the first quarter of 2026, despite a 0.6% increase in GDP. This decline indicates that higher taxes and inflation are impacting households' financial health, leaving them with less disposable income to spend or save.
While the economy recorded the fastest growth in the G7, concerns remain about the sustainability of this growth. Experts warn that the recent GDP increase may not signal a long-term recovery, especially as inflation pressures persist and the energy price cap is set to rise, further straining household budgets.