Families see their spending power get stronger

SHOPPERS had an extra £18 a week to spend in June compared ​with​ a year ago, ​thanks to the falling price of food, drink​ and ​clothing, according to Asda’s latest Income Tracker. ​

Picture: PA

The average UK household had £189 a week to spend on the things they want, rather than the items they need, which is over 10 per cent higher than this time last year.

Customer wealth was ​boosted by a 2.2 per cent fall ​in the price of food and alcohol​.

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Asda said​ the traditional British picnic will cost less this summer, as the price of food was found to be 0.2 per cent cheaper than last month and 2.2 per cent cheaper than last year.

The downward effect followed a fall in prices on a range of items including bread, jam, chocolate and confectionery.

Alcohol prices also fell 2.2 per cent compared with June 2014.

​The price of clothing was 0.8 per cent lower than the same time last year.

Summer fashion sales also helped the price of clothing and footwear to fall by 0.4 per cent between May and June.

The price of equipment for sport and open-air recreation was 2.8 per cent cheaper in June this year while games, toys and hobbies saw a 3.5 per cent price decrease compared with June 2014.

​M​ost regions ​saw a double digit increase​​ in household discretionary income over the last 12 months.

These ranged from the £12 increase seen in Wales to the £22 increase recorded in London​.

Yorkshire was below the national average with a £16 rise, but this represented an 11 per cent increase.

Northern Ireland ​saw the strongest year on year growth in discretionary income of all parts of the UK.

Households across Northern Ireland have benefited from the falling cost of essential items, as household spending power rose by 17.4​ per cent​ in the year to ​the second quarter of​ 2015.

Chief ​c​ustomer ​o​fficer at Asda, Barry Williams, said: “This month’s tracker brings yet more good news for households across Britain​.

“A​s the summer holidays approach and the days are getting brighter​ the pressure on family budgets will be lighter​, giving them a chance to spend more money on the things they want to do, rather than need to do.

“It’s reassuring to see that Northern Ireland continues with its accelerated recovery and that the North East continues to benefit from a fall in unemployment.”

Sam Alderson, ​e​conomist​ at​ Cebr, added: “The continued and widespread increases in family spending power are good news for the UK economy, particularly given the global economic uncertainty surrounding China and Greece.

​“​The increase in discretionary incomes over the last year appears to have supported a further pick up in retail spending in recent months. ​This looks likely to continue over the second half of the year and will provide a key driver of economic growth in the UK in 2015.”

While the rate of unemployment rose slightly in the latest data, Asda said the combination of an acceleration in wage growth plus consumer price inflation falling back to zero meant that discretionary income rose.

Inflation is expected to pick up later in the year. However, with wage growth accelerating, increases in family spending power look likely to continue into 2016.