Yorkshire left behind by rise in income levels

Hull, York, Leeds, Bradford and Sheffield have all seen disposable incomes rise but at a slower rate than other northern cities such as Liverpool and Manchester and Midlands rivals Stoke, Birmingham and Coventry.

And they have lagged well behind some of the leading performers with North Sea oil helping Aberdeen top the list.

Families in the granite city saw average disposable incomes rise by £2,800 to close to £18,000 in the five years to 2012.

In comparison, incomes in Sheffield rose by just over £1,000 in the same periond to £12,982.

Among Yorkshire’s major cities, York was the best performer with an average rise in disposable incomes of £1,423.

York continues to have the highest average incomes in the region at £14,507.

The figures were compiled by the accountancy firm UHY Hacker Young.

Nevil Pearce, partner at UHY Calvert Smith in York, part of the UHY Hacker Young group, said: “The cut in interest rates meant that households in York experienced a sudden drop in their mortgage payments leaving them with a lot of spare cash.

“However, stagnating wages and high unemployment means that people just haven’t felt that increase in surplus cash.”

“The reduction in interest rates gave a welcome support to York households’ disposable income during the recession, but the city has great strengths in tourism and higher education that it can build on to generate more new high paying jobs making the city wealthier and its households less vulnerable when interest rates rise.

“Students and their visiting parents bring plenty of consumer spending and the universities provide highly paid academic jobs.

“Many graduates also stay in the city, giving it a well-qualified workforce, and the Universities have also been instrumental in setting up thriving businesses.”

The figures show that Wakefield and Barnsley have seen among the biggest rises in disposable incomes in Yorkshire.

In Barnsley, incomes rose by £1,645 while in Wakefield they have grown by £1,528.

However, overall incomes in both remain lower than other parts of the region at £13,447 and £13,864 respectively.

The average household income in Leeds is £13,469 while Hull it is £11,287.

Record low interest rates have played a large part in sustaining disposable incomes through the economic downturn.

But homeowners are being warned that interest rates cannot continue to be held at their current levels indefinitely and rises are on the way.

The Bank of England did issue guidance linking any decision to raise its base rate to evidence that the number of people out of work is falling.

However, following quicker than expected falls in the unemployment figures meant that was revised and the judgement will now be based on a much broader set of economic data.

At the weekend, professor Peter Spencer, from York University, suggested that the Bank could continue with rates at their current level until well into the second half of next year as consumer spending continues to fuel the recovery.