Pressure on consumers eased a little in September, when families were £4 better off year on year.
The Asda Income Tracker revealed the increase was the largest rsince December 2009. The average UK household had discretionary income of £149 in September 2012, up 2.9% on the year before.
Asda said improvements were driven by a sharp slowing of inflation in September and a average wage rise of 2% year-on-year, but uncertainty about the wider economy and labour market continues to cause concern.
The past four months of rising discretionary incomes followed 19 months in a row of declines.
Inflation is at its lowest rate since November 2009 after clothing and electricity inflation fell. Unemployment dropped to 7.9% in the three months to August – its lowest rate in almost three years.
However, Asda said the data suggests businesses confidence in the future is uncertainty and there may be inflationary pressures ahead. And despite the lessening impact of inflation on household budgets, over a two-year period families disposable income is still £11 a week down.
Asda president and chief executive Andy Clarke said:“The good news continues for UK families for now at least, with more disposable income in their pockets now than they had a year ago.
“However it’s worrying to see the cost of essentials creeping back up, and with winter drawing in the cost of heating and lighting a home will further increase the demands on family budgets.”