Published on 26 - April - 2010
Family finances decline again in MarchAsda income tracker reveals British households are £2 a week worse off than last year, with rising transport costs and inflation rates putting pressure on spending power.
Despite a rise in gross earnings, UK households are still out of pocket compared with last year
Published today, the supermarket chain's income tracker revealed a 1.3% drop in discretionary income for the average UK household in March 2010 compared with the same period last year.
The £2 a week decrease in family spending power means that households had £153 a week of discretionary income last month. While an improvement on the previous month, which saw a discretionary income of just £149 per household in February, the figure still shows weak growth for the fourth consecutive month.
Earnings date for the month reported a 2.6% increase in gross incomes - the highest rate of growth since December 2008. However, while earnings growth in the finance and business services sector picked up, it was still weak for workers in the construction and hospitality sectors.
Asda explains that although the economy has emerged from a recession, boosting spending power for some, for many households, real disposable income growth remains weak as cost of living pressures continue.
The main pressure on spending power in March was transport costs, which rose by 11.3% in the month year-on-year compared with 10.5% in February. The cost of goods and services also increased by more than expected during the month, pushing the annual rate of inflation up to 3.4% - above the Bank of England target.
Charles Davis, the economist at Cebr who compiles the report for Asda said: There are currently mixed signals from the labour market; earnings growth has picked up in early 2010 but job creation is still weak so unemployment passed the 2.5 million mark for the first time since 1994. At the same time, the cost of living has continued to rise, with sterling depreciation and commodity price rises playing a key role. The rise in inflation above target caused a small annual decline in the Asda income tracker for the second time in four months."
Asda president and ceo Andy Bond commented: "Although the income tracker appears to have levelled off this month, our customers are telling us their situation is far from easy."
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