Asda’s latest monthly Income Tracker reveals that Brits had an extra £18 a week in their pockets in June this year. Families across the UK now have £189 a week to spend on the things they want, rather than the items they need, which is over 10% higher than this time last year.
- The price of food was found to be 0.2% cheaper than last month and 2.2% cheaper than the same time last year. The downward effect came from a range of items including bread, jam, chocolate and confectionery.
- Alcoholic beverages also saw a 2.2% decline in price from June 2014.
- The price of clothing was 0.8% lower than the same time last year.
- Summer fashion sales also helped the price of clothing and footwear to fall by 0.4% between May and June.
- The price of equipment for sport and open-air recreation was 2.8% cheaper in June this year.
- Games, toys and hobbies also saw a 3.5% price decrease compared to June 2014.
Taking a national view, most regions having seen double digit increases in household discretionary income over the last 12 months. These ranged from the £12 increase seen in Wales to the £22 increase recorded in London:
- While London saw a more subdued rate of discretionary income growth, thanks in part to higher essential item inflation, households experienced the largest increase in pound terms with household discretionary income reaching £22 per week.
- Households in the West Midlands and Scotland experienced an acceleration in the rate of gross income growth in the latest quarter. This was supported by falling rates of unemployment within these regions. Over the past year, the West Midlands has seen the rate of unemployment fall by 1.5%. Household spending power in Scotland is now growing at 10.1% year-on-year.
- The North East experienced a 2% fall in unemployment over the past year.
- Northern Ireland once again experienced the strongest year on year growth in discretionary income of all parts of the UK. Households across Northern Ireland have particularly benefitted from the falling cost of essential items, as household spending power rose by 17.4% in the year to Q2 2015.
Commenting on the findings, chief customer officer at Asda, Barry Williams, said: “This month’s tracker brings yet more good news for households across Britain – as the summer holidays approach and the days are getting brighter the pressure on family budgets will be lighter and giving them a chance to spend more money on the things they want to do, rather than need to do.
“It’s reassuring to see that Northern Ireland continues with its accelerated recovery and that the North East continues to benefit from a fall in unemployment.”
Sam Alderson, economist, Cebr, said: “The continued and widespread increases in family spending power are good news for the UK economy, particularly given the global economic uncertainty surrounding China and Greece. The increase in discretionary incomes over the last year appears to have supported a further pick up in retail spending in recent months. This looks likely to continue over the second half of the year and will provide a key driver of economic growth in the UK in 2015.”