More to spend as income growth above inflation

HOUSEHOLDS have seen their weekly discretionary spending rise by £5 in the year to February, the fastest uptick for 15 months, Asda’s income tracker suggests.

The analysis of UK incomes released today shows typical disposable incomes rising to £169 per week this February, a 2.95 per cent increase since February 2013.

The supermarket highlighted declining inflation and a drop in fuel prices as major drivers of the improvement: last month inflation dropped to just 1.7 per cent, below the Bank of England’s target, and petrol prices were 5.1 per cent lower than at the same time in 2013.

“The slowdown in inflation is helping to ease the pressure on household budgets, while the economic recovery is finally starting to feed through into wage growth, which is now starting to accelerate,” said Rob Harbron of the Centre for Economics and Business Research.

Figures released earlier this month show that private sector earnings rose by 1.7 per cent during the 12 months to January, equalling February’s inflation figure, and indicating that years of squeezed wages may finally be coming to an end.