The average UK household’s disposable income has increased for the tenth month in a row and is approaching an all-time high since Asda began recording the data.
Asda’s Income Tracker reveals discretionary income in July increased by £3 a week compared with the same period a year ago and has hit £173 a week, just short of the all-time high of £174 in January 2010.
Budgets were helped by a sharp slowdown in inflation of essential items including fuel, food and mortgage interest payments, according to Asda.
Andy Clarke, president and chief executive of Asda, said: “I’ve talked before about the differences in spending power households across the regions experience and this month the story continues.
“Macro indicators show that the economy is in full recovery, but whilst people are starting to feel more optimistic, this sense is still not consistently playing through in spending month to month, or across all regions.”
Fuel prices dropped year on year by 2.9% and food prices decreased 0.4%, while inflation on mortgage interest payments fell 0.2%.
Family spending was additionally strengthened by a delay in summer clothing sales, which started in July this year rather than June.
Meanwhile, there was employment growth of 2.8% and a 1.4 percentage point year on year fall in the unemployment rate, the lowest rate since the last quarter of 2008.
Rob Harbron, senior economist at Cebr, said: “Continued year on year gains to the Income Tracker are welcome, and discretionary income levels are now within touching distance of their pre-financial crisis highs.
“Although it’s good to see unemployment continuing to fall, there are still high levels of under-employment in the UK. It will take a longer period of economic recovery for this slack in the labour market to be reabsorbed.”