UK Living Standards Lagging: GDP Per Capita Grows 1% vs 1.9% Average Since July 2024

UK living standards appear to be lagging behind policy promises, with GDP per capita growth falling short of historical averages. The Office for National Statistics reported a 1% annual rise in 2025, below the 1.9% long-run average. Over the past year since Sir Keir Starmer took office, the average quarterly increase in GDP per capita has been 0.6%, compared to 0.9% during 2010–2024 when Labour was in opposition. Data show real household disposable income growth is the slowest on record, with the Office for Budget Responsibility projecting it to rise by just 0.6% in 2026 before additional income tax threshold freezes and a £30bn tax increase take effect. The OECD recorded a 0.8% quarterly decline in real household income per capita in Q3 2025, the largest among G7 countries, attributed to higher taxes on income and wealth. Economists warn continued weak growth will depress disposable incomes, while early signs suggest productivity gains in January may encourage more AI and capital investment, offering a potential boost to living standards later this year.