The average UK family was no better off in January than a year earlier, marking the second consecutive month where there was no change in discretionary income, according to the Asda Income Tracker.
According to the Tracker, the average UK household had £164 a week of discretionary income in January, a marginal 0.1% higher than a year earlier.
The continued pressure on the family finances comes is in spite of an increase in the rate of growth in gross income, rising 2.5% year-on-year in January, compared to an increase of 1.7% year-on-year in December.
The Office of National Statistics reported that the annual growth in earnings has fallen substantially in the recession. However, in recent months earnings growth has stabilised.
The increasing earnings growth was offset by the increasing cost of most essentials in January. The annual rate of inflation reached its fourteen month high with food price inflation rising by 1.9% in January relative to a year ago, compared to a 1.5% increase in December.
Charles Davis, the economist at Cebr who compiles the report for Asda, said: “In January annual growth in discretionary income was flat for the second successive month. Although the recession has ended, the Asda Income Tracker shows that real disposable income growth remains weak. With earnings growth across the year set to remain historically low, inflation above target and possible tax rises to come, the outlook for the UK consumer remains cautious.”
Andy Bond, Asda chief executive said: “This latest economic snapshot reflects what our customers already know, that 2010 is shaping up to be a tough year.
“Despite the official end of the recession, our customers are telling us they’re still worried about job security and balancing the family finances. With transport costs on the up and food inflation rising, we’re working hard to keep prices down for our customers and would urge other businesses to do everything they can to help ease the financial strain.”