Households see rise in disposable incomes

Households in the UK have experienced a year of growing disposable incomes, indicating that the cost of living crisis is being alleviated by falling inflation and rising wages a according to a report by Asda and the Centre for Economic and Business Research (CEBR).

Gross income for the average household grew by 10.1% and at £233 per week, was £21.50 a week higher in March 2024 than it was a year before. This marks twelve consecutive months of growth, which has largely been driven by continued elevated wage growth, decreased energy costs and significant deceleration in core inflation which is now nearing the Bank of England’s target rate.

The UK-wide Income Tracker also recorded its strongest quarterly growth since Q3 2021, with all but one UK region, the East Midlands, witnessing annual growth in spending power.

Both Scotland and the East of England recorded spending power values above the UK-wide average in Quarter 1, at £235 and £250 per week, respectively.

London recorded the highest spending power value at £311 per week across Q1. The capital is now the only UK region where spending power has now surpassed pre-crisis levels.

In contrast, Northern Ireland recorded the weakest spending power of £112, a £199 discrepancy when compared to the strongest value witnessed in London.

Reacting to this month’s Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at Cebr who produce the Income Tracker on behalf of Asda, said “The Income Tracker is showing sustained improvement, as households gradually rebound from the severe impacts of the cost-of-living crisis. Consumer spending and activity is expected to be further supported by a significant reduction in inflation driven by decreased energy costs for households from April onward, along with recent policy measures, not least due to cuts in National Insurance. This is expected to result in a sharp uptick in household spending power in April.”