The spending power of Britain’s hard-pressed consumers is slightly increasing as inflation falls and wages rise compared with last year.
The latest Asda Income Tracker, which charts the income that households have left to spend after taxes and basic living costs, shows that last month spending power was £16.56 higher compared with a year ago. This is equivalent to a 2.1 per cent increase. It is also the fifth consecutive month of growth as rising wages and falling inflation provide a boost for households, despite rising fuel prices.
Asda is Britain’s third-largest supermarket and produces the tracker with the Centre for Economics and Business Research.
Kay Neufeld, managing economist at CEBR, said that households continued to benefit from falling inflation, which was 2.4 per cent in the year to last month, and robust wage growth. He said: “Inflationary trends subside across most categories, though rising oil prices are a source of worry for motorists.”
He also said that slowing price increases meant that consumers were able to enjoy higher wage growth without having to pay more for their essential items. However, the “most significant upward contribution to inflation” came from transport costs, he said.
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