Deflation stabilised in February as inflation on essential items moved out of negative territory for the first time in more than a year.
Spending during the Valentine’s Day weekend contributed to the positive rate of inflation, according to the Asda Income Tracker.
Couples splashed out on weekends away eating out, as the cost of hotels and dining at restaurants increased almost 2% in February – the highest rate since early 2015.
But while the cost of health and education services also increased, food price deflation continued as grocery prices fell 2.3% in February on a year-on-year basis.
The average UK household enjoyed a 6.7% boost in spending power during the month compared to a year ago, as weekly disposable income increased by £12 to £197.
It marked the 16th consecutive month of double-digit increases to bank balances, Asda’s tracker said.
Asda boss Andy Clarke said: “Households across the UK continue to see a rise in their discretionary income with the falling cost of essentials including food and fuel providing consumers with more good news for February.
“We’ve also passed a milestone in the economy, with spending power growth remaining in the double digits for 16 consecutive months, positive trends in employment growth and wage increases all likely to continue to help the nation’s pockets – it also sets a positive picture for the months ahead which is encouraging for the macro economy.”
Rising wages were found to be the main contributor to the increased spending power and Cebr economist Kay Neufeld added: “With the unemployment rate as low as 5.1% and the national living wage around the corner, we can expect to see further increases in average earnings in the next months.”