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Asda Income Tracker reports lowest rate of decline since November 2010

The latest Asda Income Tracker has revealed that family spending power fell by £4 a week in May 2012 – the lowest rate of year on year decline since November 2010.

According to the latest figures, the average UK family has £146 of weekly disposable income available to them, 2.4% down on the same period last year and the smallest annual decrease since November 2010.

The slight improvement in disposable income recorded for May 2012 is largely driven by lower levels of inflation putting less of a squeeze on family budgets. Annual CPI inflation fell to 2.8 percent in May, the lowest level since November 2009.

On a positive note, key items such as food and fuel have seen lower levels of inflation than previous months – with prices up 3.3% and 0.8% respectively compared to the same time last year. However annual inflation on utilities such as electricity and gas remain stubbornly high at 8.0% and 15.4%. Linked to this, the cost of housing and household services contributed a significant 0.8 points to May’s overall inflation rate.

Andy Clarke, Asda President and CEO, said:

“Despite the modest improvement month on month, the reality of two years of continuous decline means families don’t feel any better off.

“They still have less in their pockets this month than they did a year ago – and despite an improved picture they have very real worries about unemployment and the potential impact of the wider economic situation on their finances.

“I’m pleased to see our efforts to keep the cost of feeding the family down and filling up their cars with lower priced fuel is putting much needed cash back in our customers’ pockets. But the rising costs of utilities suggests more needs to be done by other sectors to help families balance the books.”

Charles Davis, Head of Macroeconomics at Cebr comments:

“The latest movement in the Asda Income Tracker is, as falling inflation eases the pressure on household budgets.

“However, continued high levels of unemployment are likely to hold down wage growth for the rest of the year. As such, although further improvements to the year-on year decline may be seen, discretionary incomes are likely to remain relatively subdued in 2012.”

Source : Asda

22 June 2012
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