UK households enjoyed a double digit rise in their weekly spending power in January, despite growth slowing for the fourth month in a row.
Asda’s latest income tracker released today shows that consumers were £12 – or 6.7 per cent – better off in January compared with the same time last year, taking their average discretionary income to £197 a week.
However, this also marked the fourth consecutive month where the year-on-year rate of spending power growth has fallen, due to a slowdown in wage growth and a steady increase in inflation.
Supermarket price wars and falling oil prices have brought down the cost of household goods and petrol.
But overall inflation has grown for a third month in a row – now at its highest since January 2015, reaching 0.3 per cent. Still, Asda said the outlook remained positive for consumer, with incomes are growing faster the cost of essential items.
Sam Alderson, an economist, for the Centre for Economics and Business Research (Cebr), said: “Although growth in family spending power has declined in the latest data, the overall picture is positive. UK consumers have much more money to spend than a year ago.
“We expect continued falls in unemployment as well as rising earnings growth over the coming months. Combined with sustained low inflation, households should be in for a good time in 2016 as far as their finances are concerned. This comes despite broader concerns over the strength of the UK economy.”