Family finances show signs of stabilising: Asda

FAMILY finances are beginning to show signs of stabilisation after months of wild fluctuations, according to Asda’s latest Income Tracker.

The grocery chain’s Income Tracker monitors the changes in the amount of disposable income the average UK family has to spend.

Households are no better off than they were last year, but their finances are at least beginning to not deteriorate, says the latest report.

The fall in inflation has given some respite to hard-pressed households ahead of the christmas period, with inflation on essential items down 0.7 percentage points to 2.1 per cent, the lowest rate since February 2010.

However, Asda notes that wage growth has been stubbornly weak, with year-on-year wages up just 0.8 per cent in the three months to September, the lowest rise since the ONS started collecting comparable data in 2001.

Just as crucially, energy prices, the subject of so much current debate, continued to put a squeeze on household finances, with the cost of gas and electricity both up.

According to the data the average UK family had £158 of discretionary income available to them in October 2013, unchanged from last year – halting a three month period of year-on-year decline.

“The fall in essential item inflation and some much needed stability in disposable income will bring a welcome respite for customers,” said Asda president and chief executive office Andy Clarke. “But it’s clear that it will be a challenging Christmas. We know it will take time for any macroeconomic improvements to filter down into a real sense of relief for families, especially in regions hardest hit by the economic downturn.”

Rob Harbron, a senior economist at the Cebr which also produced the report, said: “The latest Tracker provides welcome signs that the squeeze on household spending power is starting to ease.”