Disposable income set to fall

Household disposable incomes will fall in the run-up to Christmas as income growth fails to match inflation.Households' average available weekly cash – after essential goods such as bills and food have been accounted for – will be £171 in September, a 4pc decline on last year, according to the Centre for Economics and Business Research (CEBR).

It will be £170 in October, £171 in November and £172 in December. The last time the figure hit £172 was in the final month of 2008. "We see things as pretty tough for the consumer. We are looking at really weak real income growth, and we expect that to continue in 2011," said Charles Davis, managing economist at CEBR, which carried out the research for Asda, the supermarket. The latter has tracked household incomes through CEBR on a monthly basis since January 2008.

Source : The Sunday Telegraph