Households are £10 per week poorer
The typical household had just £172 a week left in March after meeting all of their essential outgoings, such as food, transport and housing, £10 or 5.6 per cent less than 12 months earlier, according to supermarket group Asda.
But despite the fact that families are still worse off than they were a year ago, it was the first time in 14 months that the year-on-year fall in people’s disposable income had not been bigger than during the previous month.
The drop was driven by wages continuing to increase at a slower pace than inflation.
Gross incomes rose by 2.2 per cent during the year to the end of March but this was more than outstripped by the 4 per cent jump in the Consumer Prices Index (CPI).
But despite CPI still being twice the Bank of England’s 2 per cent target, it was lower than the 4.4 per cent it had stood at in February, alleviating the pressure on the Bank of England to raise interest rates in the second quarter.
Food prices fell slightly during the month but transport costs continued to increase as the price of petrol remained high.
Charles Davis, managing economist at the Centre for Economics and Business Research, which compiles the index for Asda, said: “Falling food prices took away some of the pressure on household finances in March – though the rising cost of petrol and transport continues to place downward pressure on discretionary income.”