Spending power falls for 40% of UK households, Asda finds
According to Asda, the fallout from June’s inflation figures most impacted lowest earning households, whose spending power growth fell by 8.1% year-on-year
Some 40% of UK households have seen their spending power growth fall in June, according to the latest Asda Income Tracker.
The decrease comes as inflation rose to a near 18-month high of 3.6% in June, driven in part by the rising cost of transport and food.
According to the supermarket, the fallout has most impacted the lowest earning households, whose spending power growth fell by 8.1% year-on-year, leading to a weekly shortfall of £74 between earnings and essential bills and everyday costs.
While the impact of this rise was “especially stark” for lower-income families, the effects have also been “felt unevenly” across the UK, Asda’s tracker found.
Households in some regions such as the West Midlands saw their spending power growth shrink by 0.6%, compared to a 12.0% growth in the same period last year.
However, this was “significantly” higher than Northern Ireland, where the lowest disposable income figure was £129 per week.
Despite this, spending power in London (£326), Scotland (£261) and the East of England (£267) remain above the UK average, with higher post-tax income and stronger job markets “helping to protect households in these regions from rising prices”.
Commenting on this month’s Income Tracker, Sam Miley, head of Forecasting and Thought Leadership at Cebr, said: “Inflation surprised to the upside in June, putting further downward pressure on the rate of growth in the Income Tracker.
“The concentration of inflation in essential categories, including food, transport, and utilities, is placing households under particular strain. Nevertheless, earnings growth remains robust and is offsetting price pressures for now.”
