Family spending power boosted in April
Figures from the latest Asda Income Tracker have revealed that family spending power increased by Â£17 a week year-on-year in April.
The figures show that the average UK household had £187 a week of discretionary income in the month, which is just over 10% higher than the same time last year.
The increase in discretionary income was a result of reduced food, fuel and utility costs as well as a drop in airfare prices.
Asda president and chief executive Andy Clarke said: “During my 30 years in retail this is the first time I’ve seen essential item deflation and I know this will be welcomed by those stocking up their cupboards. What I’m seeing in my stores is a customer who’s better off financially than twelve months ago, but one who is still battle scarred and choosing to save rather than spend on those extra treats.”
Sam Alderson, economist at Cebr, added: “With inflation turning negative in April, concerns have once again been raised about the effect of deflation on the UK economy. However, negative inflation is largely expected to be temporary. As such, the significant increases seen in household spending power should provide the economy with a major boost in 2015. In that sense deflation has helped rather than hindered the UK’s economic recovery.”
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