Asda Income Tracker shows average UK household’s discretionary income rose to record level in May 2016
UK households had more money at their disposal in May than any other month over the last eight years, according to new data from Asda – but the supermarket warned that uncertainty around this week's EU referendum makes it hard to predict how income will fare in future.
Discretionary income was up to £201 per week in May 2016, up by £13 compared to May 2015, and marking the highest amount since Asda's Income Tracker was established in 2008.
Disposable income was boosted by a drop in the cost of essential items, reduced unemployment levels, and a boost to earnings prompted by the introduction of the national living wage.
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The cost of food and drinks fell by 0.4 per cent in May, contributing to a year-on-year drop of 2.8 per cent, while clothing and footwear prices dropped by 0.2 per cent.
“While costs continue to fall for UK households and spending power growth begins to accelerate once more, the long term picture is more difficult to predict as we wait to see the impact of the EU Referendum’s decision on the nation’s pockets,” said an Asda spokesperson.
Read more: UK household spending growth slows for fourth month in a row
Sam Alderson, an economist at the CEBR, said: “The introduction of the National Living Wage and the continuation of low levels of inflation have provided households with yet another welcome boost to spending power.
“May marks the fastest annual growth in 2016 and will likely provide some much needed security to households facing the uncertain outcome to the UK’s referendum on membership of the European Union.”