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PwC sounds alarm over sluggish economic recovery

Jake Cordell
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Clocks at Canary Wharf
Consumption levels in the UK still haven't passed their pre-crisis peak (Source: Getty)

PwC has become the latest big name to raise concerns about the implications of the technological revolution on inequality, economic growth and unemployment.

In a new report, the accountants point out that while the developed world has bounced back from the financial crisis in terms of the size of individual economies, consumer spending is still down and inequality within countries like the UK and the US is on the rise.

The UK economy is now 7.6 per cent larger than its pre-crisis peak, although household spending per person is still one per cent lower. With consumers’ purchasing power set to fall as a result of sterling’s dramatic devaluation, the issue of living standards, productivity and real wages is creeping up the agenda.

PwC said the technological change will continue to exert pressure on the lower end of the income scale, though they call for governments to focus both on educational reforms and direct support for people out of work to cushion the fallout.

The tax bods also think transparency in the tax system could play a role in helping shift the debate on inequality and the fallout of globalisation. “In most Nordic countries,” Barret Kupelian, senior economist at the firm, notes, “the tax return of every citizen is publicly available.

Read more: GDP per person would fall 11 per cent if London left the UK

“Transparency extends throughout government … this transparency holds politicians to account and ensures everyone pays into the system, trusting their money will be used appropriately for redistribution and the provision of good quality public services.”

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