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Disposable income growth slows to lowest rate for 14 months
Asda's latest Income Tracker has revealed that the average UK household had a weekly disposable income of £194 in December, up £13 on December 2014.
However, the supermarket found that the annual growth in spending power slowed to its lowest rate for 14 months due to a slowdown in wage growth and a slight increase in inflation.
Asda chief executive Andy Clarke, said: “Throughout 2015 falls in commodity prices and a strengthening pound contributed to higher discretionary income in households across the UK.
“We’ve also passed a milestone for the British economy, with inflation remaining at zero for a full calendar year for the first time since records began. Despite these positive economic indicators, spending patterns remain erratic.
“Although falling vehicle fuel costs are putting extra pounds in consumers’ pockets, this doesn’t necessarily translate to an increase in household spending.”
While the rise in disposable income slowed across the UK during the fourth quarter of 2015, all but two regions saw household discretionary income rise by £10 or more over the past 12 months.
Households in London saw their discretionary income reach £259, which marked a 5.8% rise year-on-year. Meanwhile a £20 rise for families in the East of England led to disposable income reaching £218.
Northern Ireland experienced the strongest year-on-year growth at 10.5% boosted by a sharp fall in the price of some essentials, and a rise in employment over the past 12 months. In Scotland, the outlook was a little less positive, with slowing wage increases reducing the rate of disposable income growth to 5.6%.
Clarke added: “It’s encouraging to see that the regional picture was positive overall, but with varying contributing factors. Northern Ireland again experienced the fastest growth in discretionary income, but still remained disproportionately behind the rest of the UK. In comparison Scotland’s growth slowed as a result of increased pressure on the public sector and the price of oil.”