The average UK family is £10 a week better off compared to October 2008, according to the latest report from the Asda Income Tracker.
The average household had £162 a week of discretionary income in October this year, 6.5% higher than a year earlier. This represents a significant increase year on year, but in cash terms discretionary income has been flat for the last three months.
The report said several factors are putting downward pressures on discretionary incomes, and it expects to see a fall in the tracker over the coming months. These factors include a cumulative rise in transport costs, which have increased 3.5% year on year and a rise in food and drink inflation.
The annual rate of inflation increased to 1.5% in October, up from 1.1% in September. This is the first rise in the annual rate of inflation in seven months and the most significant rise since September 2008.
Charles Davis, an economist at Cebr who compiles the report for Asda, said: “In October, the Asda income tracker shows a smaller year on year gain in discretionary income than September. Households are better off compared to a year ago, thanks to falling mortgage payments and utility bills.
“However, the price of some essentials, notably transport and food, are rising relative to last year. This, combined with particularly weak earnings growth is putting downward pressure on discretionary incomes.”
Andy Bond, Asda president and chief executive, said: “Although we are seeing a rise in some household essentials, it’s up to retailers to try and keep prices as low as possible for customers during the countdown to Christmas.
“With transport costs on the up and food inflation rising, we’re doing everything we can to keep prices down for customers. Whether that’s offering the cheapest petrol, the best deal on your Christmas basket, or amazing offers on George and Home and Leisure, at Asda we’re determined to make the festive season even more affordable.”