UK families’ spending power fell £13 a week on last year, according to Asda.
The latest Asda Income Tracker has revealed that family spending power fell by £13 a week year-on-year in October, leaving the average UK family with £164 of weekly disposable income – 7.1% down on this time last year.
While this represents a year-on-year decline, it is an improvement on the previous month, with further improvements expected up until Christmas.
Family budgets continue to be squeezed. In October, gas prices were some 24.1% higher than a year ago, while electricity prices grew by 14.9%.
Transport costs continue to put pressure on the inflation rate, with the cost of getting around remaining a large driver of the headline rate of CPI inflation.
The report by the Centre for Economic and Business Research and commissioned by Asda predicts that the amount of disposable income available to UK families in December will be £8 lower than in December 2010, representing a month-on-month improvement suggesting the rate at which family spending power is eroding is slowing.
The Income Tracker has shown annual declines in average family spending power every month through 2010 and 2011.
Asda’s Pulse of the Nation Survey revealed that 43% of its customers are worried about the cost of Christmas and that parents are more worried than non-parents, with a quarter of parents cutting back and 21% sticking to the same budget as last year.
Asda president and chief executive Andy Clarke said: “In addition to job security, the cost of basics – fuel and utilities in particular – remain the top of our customers’ agenda. The fact is people still have less money to spend now than they did a year ago.
“That said, I welcome the fact that disposable income shows a slight improvement from last month. We know this will help ensure families can better afford the Christmas they deserve.”