The lowest-earning British families saw a growth in disposable income in February for the first time in two and a half years. However, that positive development, revealed in Asda’s monthly Income Tracker, was tempered by this news:
Those families still don’t have enough cash to make ends meet. They are still short £68 every month when paying for essentials.
Still, it’s hard to not see a silver lining in a 4.9% growth last month because of to two factors – a rise in their incomes and a slowdown in inflation.
Asda’s tracker showed that discretionary income was up by £18.56 year over year, the 11th straight month it saw an uptick. The February result was the best since last autumn.
“The Income Tracker has been improving for almost a year now, with households continuing to recover from the depths of the cost-of-living crisis,” said Sam Miley, Managing Economist and Forecasting Lead at Cebr who produce the Income Tracker on behalf of Asda. “A particularly sharp uptick is expected to take place from April, when inflation will ease significantly off the back of lower household energy bills. This will help to support spending power and consumer activity.”
Expected growth is also likely to come from lower National Insurance Contribution rates, boosts in pension payments, and increases to the National Living Wage.
All of that will be welcome news for consumers, as well as those throughout the supply chain who are dependent on their spending. Discretionary income is still just over 6% lower than it was at its peak.
Supermarkets like Aldi, Lidl and the giants like Asda are doing their level best to keep pricing low, including those on healthy foods such as fruits and vegetables. They’ve also continually increase wages for their hourly workers.
