Consumers’ disposable income fell in 10 out of 12 UK regions last month as gains in salary were offset by the rising cost of household bills.
The average household had £197 of discretionary spend per week in September, down 94p year-on-year or 0.5%, according to the Asda Income Tracker.
London and Yorkshire were the only two regions in the UK that reported a rise in discretionary income year-on-year in the third quarter of the year as inflation in costs of essentials such as fuel and household bills cancelled out increases in income or household benefits.
Electricity inflation held steady at 9% for the third consecutive month while transport inflation rose to 4.2% in September.
The average level of discretionary spend per household had reported a decline in the last five out of six months.
Cebr economist Kay Neufeld said: “The cost of essential spending has risen considerably since the beginning of the year and we expect that it will take a few more months until inflation slows down.
“Until then, households in regions with stronger labour markets and lower unemployment have the best chances to keep losses in discretionary income small.”