Customer Behaviour

Families’ spending power reached a milestone of £200 a week typically in April – the highest level since at least 2008 – according to a report.

The average UK household had £200 a week in discretionary income last month, marking a £12-a-week increase compared with the £188 they had in April 2015 – the Asda Income Tracker found.

The figure is the highest since the income tracker, compiled for Asda by the Centre for Economics and Business Research (Cebr), started in 2008.

Households’ spending power is the amount of cash they have left over to spend on outgoings such as holidays, cinema trips, eating out, sports, savings, and technology, after paying for essentials such as food, clothing, housing costs and transport.

The report said a fall in inflation in April helped to offset the effects of slowing wage growth. Consumer Price Index (CPI) inflation fell to 0.3% from 0.5% in March.

The income tracker said transport costs had fallen by 1.3% annually, while vehicle fuels costs had fallen by 7.5%.

A 3.2% fall in the cost of air transport prices had also been seen over the past year, while food and drink prices were down by 2.5% on last year.

Cebr said increases in the income tax free personal allowance were helping to put more money in the pockets of the nation’s households.

Andy Clarke, Asda president and CEO said: “April was the first time that discretionary income reached the £200 level since the Asda Income Tracker began, which is a significant milestone for consumer spending power.

“Double-digit growth in household income is clearly good news for UK consumers, although we continue to see them take a prudent approach to spending on every day items.

“Looking ahead, the outlook remains cautiously optimistic, which is encouraging and should give consumers a boost as we head into summer.

“Although, whilst inflation is likely to recover over the coming year, the uncertainty over the EU referendum makes it difficult to forecast long-term consumer confidence.”

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