UK Disposable Income on the Rise: Asda Records Surge in Spending

June 2024, London — Recent data reveals a significant increase in disposable income across the UK, contributing to higher spending in both food and non-food categories, particularly at Asda. The lowest earning households recorded an impressive 12.6% growth in disposable income in May, marking their strongest annual growth in nearly three years.

Key Highlights:

  • Disposable Income Surge: The average disposable income for all UK households rose by 15.1% year-on-year in May, reaching £239 per week. This figure represents the highest level in 32 months.
  • Low-Earning Households: These households saw a near three-year high in disposable income, despite their budgets remaining under pressure. Their take-home pay still falls short of covering essential spending, leaving an average weekly shortfall of £66.
  • Asda’s Performance: Asda’s Income Tracker highlighted that the average UK household was £31.33 better off per week in May compared to the same period last year, following a 15.1% increase in disposable income.

Inflation and Earnings Growth:

A key driver behind this improvement is the deceleration of inflation. For the first time in over two years, annual inflation has hit the Bank of England’s 2.0% target. This slowdown in consumer prices, particularly in essential categories such as food, drink, and clothing, combined with strong income growth, has boosted household spending power.

Record Improvements:

All UK households recorded record monthly improvements in annual growth in spending power. Notably, the highest earning households have now surpassed their pre-cost-of-living peaks in disposable income.

Economic Insights:

Pushpin Singh, Senior Economist at Cebr, commented on the positive trajectory of the Income Tracker. He noted, “The Income Tracker continues to improve, with discretionary income increasing to £239 per week. This improvement is driven by several factors, including elevated nominal earnings growth, easing inflation, the uplift in the National Living Wage, and tax policy changes. Cebr anticipates further improvements in spending power in 2024, bolstered by the strong growth momentum seen in Q1 2024.”

Asda’s Commitment:

Despite the positive trends, Asda acknowledges that many families continue to feel the strain of the cost of living. In response, Asda is committed to supporting communities and customers through new value propositions. The supermarket has announced price cuts on hundreds of products worth £70 million, reducing prices by an average of 11% to maintain its position as the UK’s lowest-priced traditional supermarket.

This strategic move underlines Asda’s focus on delivering value to customers, ensuring that even as disposable incomes rise, shoppers can continue to benefit from affordable prices on essential goods.

For more detailed economic insights and the latest updates from Asda, please visit the Asda Income Tracker and Cebr.


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