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Families £9 a week better off than a year ago according to Asda income tracker
6.2 per cent year on year increase in discretionary income of average UK household
The average UK family is £9 a week better off compared to July 2008 as the Bank of England keeps interest rates on hold at a record low of 0.5 per cent. As a result, the average household had £163 a week of discretionary income in July 2009, 6.2 per cent higher than a year earlier.The year on year rises in the tracker are largely due to comparison with a per
Food and drink inflation is now at its lowest since September 2007, however transport costs have risen for six months in succession as petrol prices hit their highest level since October 2008.
According to the latest Income Tracker report gross income rose by £7 a week in July 2009 compared with a year earlier. After tax, average family incomes rose by £4 a week in July 2009 relative to a year earlier. However, inflation held steady on the consumer price index, with prices flat in the month.
Andy Bond, ASDA president and CEO welcomed the increase in household income, but warned people may be reluctant to spend it. He said: "This is obviously a positive trend for consumers who have been feeling the pinch in the credit crunch. As we've seen over the past year, even a small movement in discretionary spend can make a big difference to a household budget.
However, how people choose to spend their money is still dictated by sentiment, and consumers remain fundamentally cautious about the future. Despite households now being £9 a week better off, these continue to be challenging times. It is by no means going to be a straight line to economic recovery.”
Charles Davis, an economist at Cebr who compiles the report for ASDA, said: “In July, the Asda income tracker shows average families are £9 a week better off than a year ago.”
“Inflation is expected to fall further as the economy runs below capacity, boosting spending power. However, spending power could also come under some pressure from the global economic recovery pushing commodity prices higher and the weak labour market outlook.”
Mortgage interest payments stood 45.5 per cent lower in July 2009 compared with a year ago- as the Bank of England keeps interest rates on hold at the record low of 0.5 per cent. Overall essential spending was £5 a week lower in July 2009 compared with a year earlier. Spending power for discretionary items was £9 a week higher in July 2009 relative to July 2008.
Inflation on household utilities remains high, with gas bills 22.7 per cent higher than a year earlier and electricity 6.8 per cent higher. Households were helped by a 0.4 per cent month on month decline in food and non alcoholic drink prices; annual food inflation is now at it's lowest since September 2007. In addition, discounting of clothing and footwear caused prices to fall by 3.2 per cent in in July from June, to stand 8.1 per cent lower than a year earlier.
Tagged as: asda | income tracker |
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