One out of every five households are left with only £12 per week after covering essential expenses, according to recent research findings. The situation is even more dire for the lowest-earning 20% of families, who experience an average weekly shortfall of £73.
The Centre for Economics & Business Research’s report serves as a stark reminder that many individuals are still grappling with the ongoing cost of living crisis. The research, based on Asda’s Income Tracker, highlights that the average household has £258 per week remaining after settling taxes and essential bills, representing a marginal increase of just £8.28 compared to a year ago.
Households are facing financial challenges as wages struggle to keep pace with inflation, the job market remains subdued, and escalating energy costs impact financial stability. While there has been a slight improvement in disposable income due to a decrease in inflation to 2.8%, concerns loom over a potential resurgence as a result of the economic repercussions of the Middle East conflict.
Higher-income households continue to witness growth in their disposable income, benefiting from a smaller proportion of spending on necessities like food and a higher resilience to price hikes in everyday goods. Sam Miley, head of forecasting and thought leadership at the Cebr, noted that the Asda Income Tracker displayed weak momentum with a 3.3% annual growth rate, while discretionary incomes only grew by 0.6% month-on-month, remaining below levels seen earlier in the year.
Recent data from Worldpanel by Numerator indicated a slight decrease in food price inflation from 3.1% to 3% in the past month, offering some relief to those struggling to make ends meet. Despite this, experts anticipate a potential increase in grocery bills in the near future due to the lasting impact of the economic fallout from the Middle East conflict.
Supermarket sales saw a 2.4% increase in the four weeks leading up to mid-June, driven by the record-breaking heatwave in the UK. Strong demand for summer essentials was evident, with suncare sales more than doubling and fresh beef burger sales rising by 40%.
