Disposable income 'falls again'
Published 20/10/2010 | 00:12
The amount of disposable income families had fell for the ninth consecutive month during September, research has indicated.
The typical family was £4 a week worse off during the month than they were in September 2009, according to supermarket group Asda.
People had an average of £177 a week left to spend on discretionary items once they had paid all of their bills, down from £181 a year earlier.
The fall was caused by take-home pay failing to keep pace with rising prices, with steep increases in the cost of clothes, shoes and food.
The overall rate of inflation as measured by the Consumer Price Index was 3.1% during September.
The continued squeeze on disposable income came despite the fact that average earnings growth picked up during the previous month to stand at its highest level since June 2009, and gross pay was 2.6% higher in September than it had been 12 months earlier.
Charles Davis, an economist at the Centre For Economics and Business Research who compiled the report for Asda, said: "Family spending power was still down on the previous year in September. The growth in household earnings as the economy recovers from recession is failing to keep pace with rising prices of essential goods and services.
"Soaring global commodity prices and rising world labour costs are starting to feed through into higher essential goods prices in the UK."
Andy Clarke, chief executive of Asda, said: "The ninth consecutive month of decline in family spending power is significant and adds further weight to what our customers have already been telling us - it's going to be a challenging Christmas for everyone."