Andy Burnham’s Manchester has recorded the biggest drop in living standards of any major city in England, new analysis shows.
A study by the Resolution Foundation, published on Wednesday, found the spending power of residents in the Northern city fell by 7pc between 2021 and 2023. The average drop across the country as a whole was 4.7pc.
The decline means that real disposable income per person in 2023 was actually slightly lower than when Mr Burnham became mayor of Manchester in 2017.
The figures will undermine Mr Burnham’s claim of boosting Manchester’s economic performance during his time in charge.
He has repeatedly hailed his record as mayor as proof that he is the person best equipped to run the UK economy.
Sophie Hale, research director at the Resolution Foundation, said Manchester’s steeper drop in incomes was likely driven by lower productivity growth under Mr Burnham compared with other cities.
The figures also reflect the immediate period after the Covid pandemic, when Manchester may have seen a larger unwinding of government policies such as the furlough scheme, she said.
Longer-term, between 1997 and 2023, Manchester still recorded the steepest rise in living standards of any major city in the UK, with real disposable incomes per person climbing by 40pc.
But real disposable incomes per person in 2023 were still just £16,500, which is less than Sheffield, Newcastle and Liverpool and 41pc lower than in London, where the average was £27,900.
The study reveals the effects of both Covid and Russia’s war in Ukraine on UK households.
Soaring prices in the wake of the 2022 energy crisis meant inflation outpaced nominal wage growth, pushing down real incomes in all major cities between 2021 and 2023, the report showed.
Higher tax rates also reduced take home pay across the country.
Ms Hale said: “This big thing that was going on here was price inflation exceeding income growth, which was happening across all regions, and it wiped out a few years of income growth, and Manchester had previously been growing quite fast.”
According to the Resolution Foundation, second behind Manchester for the biggest drop in living standards was Sheffield, where real incomes fell by 6.1pc.
Bristol had the smallest decline, down 4pc, while Londoners saw their purchasing power fall 5.1pc.
Outside England, Cardiff and Glasgow saw larger drops than Manchester, with respective drops of 9.2pc and 8pc.
The Resolution Foundation found that the Government’s “levelling-up” agenda, which was launched by Boris Johnson, the prime minister in 2019, has so far largely failed to close regional income gaps, which have remained largely unchanged in the last 30 years.
Ruth Curtice, the chief executive of the Resolution Foundation, said: “PM-in-waiting Andy Burnham has rightly put regional inequality at the top of his agenda.
“But turning ambition into reality will require investment in transport, housing and wider economic development on a scale that no recent political leader has come close to meeting.”
She added: “Unless that investment is taken seriously, the economic and political cost of Britain’s geographic divides will continue.”