Latest figures from the Asda Income Tracker show that families had £205 of disposable income available each week during January, a rise of 3.5% from the same period last year. However, the £7 per week uplift in spending power was the slowest rate of growth recorded by the tracker since August 2014.
Asda said that increasing petrol prices (+16.8% year-on-year) had the largest impact on the rise in the cost of living for families. Prices have also spiked upwards in restaurants and hotels, communication, alcohol, and tobacco. Whilst mortgage interest rates, gas prices and food and drink still saw deflation compared to January 2016, Asda stressed that there is still an increased pressure on consumers as inflation edges towards the bank of England’s target rate of 2%.
Scott Corfe, Economist at Cebr, the firm that gathers the data, said: “The party is starting to fizzle out for consumers in 2017, with growth in discretionary spending fading fast. The latest Income Tracker sets the scene for next month’s Budget, when the Chancellor will be under pressure to deliver some tax cuts for the ‘just about managing’ at a time when incomes are under the cosh. He will have a delicate balancing act between providing these tax cuts, and needing to boost spending on the NHS and care.”