One out of every five households is 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 families, who experience an average weekly deficit of £73.
The Centre for Economics & Business Research’s report serves as a stark reminder that the cost of living crisis continues to impact many individuals on a daily basis. The research is based on Asda’s Income Tracker, which indicates that the average household has a surplus of £258 per week after settling taxes and essential bills, representing a marginal increase of just £8.28 compared to the previous year.
In the midst of challenging economic conditions, where inflation is outpacing wage growth and rising energy costs are straining household budgets, many are struggling to make ends meet. While there has been a slight uptick in disposable income due to a decrease in inflation to 2.8%, concerns remain about a potential resurgence in inflation following the economic repercussions of the Middle East conflict.
Higher-income households are experiencing growth in their disposable income, as they allocate a smaller portion of their budget to essentials like food and are less affected by price hikes in everyday goods. Sam Miley, from the Cebr, noted a sluggish momentum in the Asda Income Tracker, with discretionary incomes growing modestly, remaining below the levels observed earlier in the year.
Recent data from Worldpanel by Numerator indicates a drop in food price inflation from 3.1% to 3%, offering some relief to individuals facing financial constraints. However, experts anticipate a potential increase in grocery costs in the near future due to the economic aftermath of the Middle East conflict.
Supermarket sales saw a 2.4% increase in the four weeks leading up to mid-June, coinciding with record-breaking May temperatures and a 10-day heatwave in the UK, driving strong demand for summer essentials. Suncare products sales more than doubled, while fresh beef burger sales surged by 40%.