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Record-breaking decline in family spending power continues

Published: 24 February 2011
Family spending power declined 4.7% year-on-year in January, representing the second record-breaking month in a row, according to the latest results from the Asda Income Tracker.
Record-breaking decline in family spending power continues
The average UK household had £174 a week of discretionary income, a fall of £9 per week and the largest decline since the Income Tracker began in 2007.

While spending power was up £2 against December, when families had £172 per week to spend on leisure and recreational items, the tracker shows that family discretionary income has declined for 13 consecutive months year-on-year.

The continued decline was the result of the price of essential goods and services rising faster than net income growth, said Asda. Gross income grew by 2.4% in January, down from 2.6% in December but above the lows experienced in 2009.

The rise in inflation points towards the depreciation of sterling, rising global commodity prices and January's VAT rise, the report continued.

Adsa president and ceo Andy Clarke said: "The latest drop in household spending power reflects what we're seeing in our stores - customer making each pound count. We're conscious that we're now seeing year-on-year declines in disposable income that reinforce our responsibilities to shoppers - holding back inflation, keeping prices low, and being at our best in helping them deal with whatever the economy throw at them."

The factors causing the Income Tracker to decline are "likely to continue over the short term", said the report.


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