The UK family was £2 a week worse off in March than a year earlier, according to this month’s Asda Income Tracker.
The average UK household had £153 of discretionary income in March, 1.3% lower than a year earlier. The pressures on the cost of living mean annual growth remained weak for the fourth consecutive month.
Gross incomes increased by 2.6% year on year in March, the highest rate of growth since December 2008. However, earnings growth in finance and business has picked up but for some in sectors such as construction and hospitality, earnings remain weak.
The cost of goods and services increased by more than expected in March, pushing the annual rate of inflation up to 3.4%, up from 3% in February.
Charles Davis, the economist at Cebr who compiles the report for Asda, said: “There are currently mixed signals from the labour market; earnings growth has picked up in early 2010 but job creation is still weak so unemployment passed the 2.5 million mark for the first time since 1994. At the same time, the cost of living has continued to rise, with sterling depreciation and commodity price rises playing a key role. The rise in inflation above target caused a small annual decline in the Asda income tracker for the second time in four months.”
Andy Bond, Asda chief executive said: “Although the income tracker appears to have levelled off this month, our customers are telling us their situation is far from easy.
“With the rising costs of daily essentials such as food and petrol having a real impact on monthly budgets, families are still finding it extremely tough out there.”