A recent report by Asda and the Centre for Economic and Business Research (CEBR) unveils a promising trend for households across the UK, as disposable incomes experience steady growth amidst the cost-of-living crisis. Gross income for the average household surged by 10.1% in March 2024, reaching £233 per week—£21.50 higher compared to the previous year. This marks twelve consecutive months of growth, driven by elevated wage levels, reduced energy costs, and a notable deceleration in core inflation, which is now nearing the Bank of England’s target rate.
The UK-wide Income Tracker reveals its strongest quarterly growth since Q3 2021, with almost every region witnessing an increase in spending power. Scotland and the East of England lead the charge, boasting spending power values above the UK-wide average at £235 and £250 per week, respectively. Remarkably, London emerges as the frontrunner with the highest spending power value of £311 per week, surpassing pre-crisis levels and signaling a robust economic recovery in the capital.
However, the report highlights regional disparities, with Northern Ireland recording the weakest spending power at £112 per week—underscoring a substantial £199 gap compared to London’s figures. Despite regional variations, the overall trajectory suggests a positive outlook for household finances, with increased spending power expected to fuel consumer spending and economic activity in the months ahead.
Commenting on the Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at Cebr, expressed optimism about the sustained improvement, noting the gradual rebound of households from the severe impacts of the cost-of-living crisis. Miley anticipates further support for consumer spending, driven by a significant reduction in inflation, particularly in energy costs, and recent policy measures such as cuts in National Insurance. This optimistic forecast hints at a sharp uptick in household spending power in the upcoming months, offering much-needed relief to households grappling with financial pressures.
