Asda chief executive Andy Clarke has called on the Government to increase the income tax threshold as shopper spending comes under increasingly intense pressure.

Clarke wants the Government to bring the threshold into line with the salary of someone on the national minimum wage. He said previous increases had led to an improvement in the finances of Asda customers.

The income tax threshold is currently at £9,440 and is due to rise to £10,000 next April. However, Clarke wants to see this figure pushed further.

The average UK household will be £1,300 a year worse off in 2018 than in 2009 when spending power was at its peak, according to data released today to coincide with the fifth anniversary of the Asda Income Tracker.

It also showed the average UK household will spend £3,900 a year more on essential items – such as transport, utilities and housing – in 2018 than they do now.

Clarke said: “I want a fair recovery and as the benefits of the recovery should be fairly distributed, there should be fairness in respect of the actions taken to reduce the structural deficit.

“I’d like to see better opportunities for the one million young people currently out of work and an increase in the income tax threshold to bring it into line with the salary of someone on the national minimum wage.”

The annual salary of someone on the national minimum wage is £12,875.

Clarke believes the change in the threshold will help lower income households. The data showed this group will see their discretionary income fall in nominal terms by almost a third  to £1,200 a year by 2018 – equivalent to just £23 a week.

Clarke said he expects food prices to rise in the long term but vowed that Asda would battle inflation to keep the cost to customers low.

He said: “Food prices have to go up. The responsibility we have is to keep food prices at an affordable level. The consumer is already voting with their feet for value, it’s up to us as a business to mitigate it.”

Clarke added that inflation of Asda’s prices is a third of the grocery market average as the retailer deliberately holds them down.

His comments echo those of arch rival Tesco’s chief executive Philip Clarke, who in July said food prices will rise as a result of rising commodity prices and changes to consumers’ diets.

The Asda data also showed that by 2019, the average UK household will have just £147 a week of real disposable income in 2012 prices.