Family spending power eroded in May
Families¬í spending power fell by ¬£1 a week year-on-year in May driven by rising inflation and persistently weak wage growth, the Asda Income Tracker has shown.
The supermarket’s monthly figures reveal that the average UK family had £157 a week of discretionary income in May 2013, down £1 a week from the same month last year and £8 a week from its peak in February 2010.
A weak increase in the average UK wage was a key factor behind the rising cost in living, with average pay up just 0.9% in the three months to April. This was less than a third of the rate of essential item inflation of 2.9% and the second lowest rise on record since the Office for National Statistics began collecting comparable figures in 2001.
A sharp rise in inflation of essential items, up 0.3 percentage points, also added to the squeeze on household finances.
Asda president and CEO Andy Clarke said: “Last month the increase in personal tax allowance relieved the pressure on family budgets, as green shoots in the economy started to emerge. However, the reality of three years of near continuous decline in disposable income means families don’t feel any better off.
The fluctuation of disposable income levels throughout 2013 further demonstrates the fragility of spare cash available to families, which is crucial to stimulating economic growth.”
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