Asda Income Tracker Reveals Spending Power Decline In April

The latest figures from Asda’s Income Tracker show that all UK households experienced a monthly decline in spending power in April, as inflation rose to its highest level in 15 months.

Annual inflation, measured by the Consumer Prices Index (CPI), increased to 3.5% in April, a rise largely driven by higher gas and electricity prices following last month’s increase in the Ofgem energy price cap.

Water and sewerage bills also recorded their sharpest rise since at least 1988, while the cost of foreign holidays contributed further to overall inflationary pressures.

The increases across key sectors meant that although the average household had £11.53 more to spend per week compared to the same time last year, rising living costs wiped out the difference and in real terms households were worse off as a result. Household disposable income in real terms fell by £8.35 compared to the previous month, bringing it down to £249 per week in April.

The impact of rising inflation was even more pronounced on low-income households as they spend a greater share of their income on essentials and have limited financial flexibility to absorb higher costs.

In April, disposable income for the lowest earners fell by 10.6% year-on-year, resulting in a weekly shortfall of £75 and making it increasingly difficult for them to cover basic living essentials.

Although budgets remain tight for these families, the recent increase in the National Living Wage (NLW), which came into effect last month, is expected to provide some relief for lower-income households in the months ahead.

Reacting to this month’s Income Tracker, Sam Miley, Head of Forecasting and Thought Leadership at Cebr, said:

“Inflation jumped to 3.5% in April, its highest level since January last year. Given that the change in the rate of price growth was particularly stark across essential spending categories, such as energy and transport, households are experiencing growing pressure on their costs since the start of the year.

“The Income Tracker weakened as a result. Thought this will be a blow to households, we expect there to be some improvement for much of the rest of the year, with earnings growth expected to outpace inflation.”

Asda remains committed to delivering outstanding value for families and continues to be consistently recognised in independent price comparison surveys as the UK’s lowest-priced traditional supermarket.

Earlier this month, the retailer marked its 60th anniversary by cutting the price of its popular ‘Kids Eat for £1’ meal deal to just 60p throughout May. This means a family with four children can enjoy hot meals for under £2.50. With the May half-term now under way, families have until 31st May to take advantage of the offer.

You can view this month’s tracker, here.

Source : Asda

Image : Teamjackson / The Springs Retail Park / iStock / 1642478330

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