Family spending power in March improved on the previous month for the first time in 14 months according to Asda’s Income Tracker.
The average family had £172 per week to spend in March, compared to £169 in February. March’s figure is still £10 a week down year-on-year, but February was down £11.
The rise in family spending power in month-on-month was due to the fall in inflation in March to 4%, down from 4.4% in February.
Petrol costs continued to rise in March and remain the greatest risk to household spending power according to the tracker.
The fall in spending power in London was lower than any other region as Londoners spent less on transport so have been less effected by rising petrol prices. The average gross weekly household income in London for the first three months of the year was £936, much higher than the £724 seen for the UK as a whole.
By contrast, spending power has fallen sharply in Northern Ireland with an annual decline of 11.9% as the region will be heavily affected by public sector job losses and pay freezes.
Asda chief executive Andy Clarke said:”The message to retailers is clear, keeping prices as low as possible can make a real difference to the money left over at the end of the month.”
CEBR managing director Charles Davis said: “Falling food prices took away some of the pressure on household finances in March – though the rising cost of petrol and transport continues to place downward pressure on discretionary income.
“Annual earnings growth remains subdued, standing at about half the rate of consumer price inflation. Unless household pay packets grow more strongly over the coming months, the Asda Income Tracker is likely to remain weak throughout much of 2011.”