Average disposable income across the UK reached a new high in July, helping families "shrug off much of the post-Brexit concern that has plagued businesses and financial markets".
Families have experienced a 1.9 per cent increase in earnings since July last year, with disposable income reaching £202 a week, according to Asda’s Income Tracker.
However, Asda said this was the lowest rate of spending power rise since October 2014.
Asda found that growth in spending power slowed, with essential item inflation up 0.1 per cent. Asda said the falling value of the pound is likely to push inflation further up in 2017.
The tracker also found that the highest-earning households took home 10 times more than the lowest income families, and the wealthiest have grown eight times faster.
The average disposable income for UK households in July reached £202, up £10, or 5.4 per cent, on July 2015.
“Household spending growth hung in double digits in July, which – alongside brighter weather – helped to support a strong month of retail spending,” said Sam Alderson, an economist at the Centre for Economics and Business Research (CEBR).
“Despite falls in confidence, the continued improvements in household finances have helped families shrug off much of the post-Brexit concern that has plagued businesses and financial markets. However, the outlook may not be so bright as rising inflation through into 2017 could place significant pressure on household budgets.”
What you need to know