UK DIY News
Asda Income Tracker: disposable income remained flat in December 2012
The latest Asda Income Tracker shows that family spending power was flat in December 2012 – the first time since May that disposable income has failed to rise.
- The average UK family had £144 a week of disposable income in December 2012, unchanged from the same month a year before but £10 lower than December 2010.
- This latest halt in growth follows a six-month period of increases
- Energy prices were a key factor in the rising cost of living in December, with prices up 3.8% yoy
- Good news as UK unemployment fell to 7.7% but weak economy continued to hold back a rise in wages
- Net household income growth slowed to 2.6% yoy, the weakest growth since the first third of 2012
According to the latest figures, released today (January 25th 2013), the average UK family had £144 of weekly disposable income available to them in December 2012 – unchanged from last year but £10 lower than in December 2010.
The latest halt in growth follows six months of increases, suggesting that budgets are once again under pressure as we enter the new year.
Housing costs, including rental and energy prices, were the biggest factor in the rising cost of living in December, with energy prices up 3.8% over the past year. Price hikes at five of the six major energy suppliers put pressure on both electricity and gas prices, which are now a lot more expensive than a year ago.
The cost of mortgages and food price inflation, in part due to poor harvests, were again key factors, however, there was better news for car owners as falling petrol and diesel prices in December helped to take the pressure off household bills.
The job market has continued to improve with unemployment dropping to 7.7%, but a weak economy held back private-sector wage growth, which was well below inflation at 1.4% – the lowest growth since July 2010.
Across the regions, there was good news for households in the North East, with disposable income rising to £126 – the fastest annual growth in the UK, at 6.2%. However, many other parts of the country continued to suffer a fall in spending power over the three months to December.
This was particularly the case for families in Northern Ireland, where the Income Tracker fell by 7.1% year-on-year to £77, reflecting a substantial increase in unemployment in the region. The East Midlands and the South East also saw marginal annual declines in discretionary income in the final quarter, of 1.6% and 1.3% respectively.
The growing disparity between London and the rest of the UK also became more evident in December 2012. Families in the capital had £274 of weekly disposable income available in the final quarter of the year – significantly more than Northern Ireland (£77), Scotland (£144), Wales (£154) and the UK average (£146).
Asda President and CEO Andy Clarke said: "The latest tracker paints a pretty bleak picture. Our customers are no better off than a year ago, and are significantly worse off compared to two years ago.
“The recent cold snap will be piling even more pressure on family incomes with energy prices continuing to rise.
“On the up side, we are seeing the lowest unemployment levels since March 2011, falling to 7.7%, which is good news for UK PLC.”
Rob Harbron, an economist at CEBR said: "Although it remains encouraging that households are no longer seeing sharp declines in discretionary income, December’s Income Tracker figures show that risks remain for UK consumers.
“Pressures on discretionary incomes at the end of 2012 came from high energy price hikes, mortgage and rental costs and food price inflation, factors that are likely to continue into coming year. In addition, income growth remains weak, as the UK economy struggles to grow enough to drive significant pay increases.”
Source : Asda Press Centre
http://your.asda.com/press-centre/disposable-income-flat-year-on-year-as-energy-prices-start-to-bite
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