Asda income Tracker: Disposable income remains flat in December

Asda said it was the first time since May that family spending power had not grown.

The average UK family had a weekly disposable income of £144 in December - £10 lower than the same period two years before.

The grocer said that housing costs were the biggest contributors to the rising cost of living in December. Energy prices increased 3.8% over the past year as five of the six energy suppliers increased their prices.

The Income Tracker said that the job market had improved, with unemployment dropping to 7.7%.

Asda president and chief executive Andy Clarke said that the latest tracker painted a bleak picture.

“Our customers are no better off than a year ago, and are significantly worse off compared to two years ago. The recent cold snap will be piling even more pressure on family incomes with energy prices continuing to rise.”

Asda’s data showed wide variation between the regions. December proved to be a better month for households in the North East, with disposable income rising to £126 - the fastest annual growth in the UK - at 6.2%. However, for those in Northern Ireland, their spending power fell by 7.1% compared to December 2011 to £77, as a result of an increase in unemployment in the region.

Families in the East Midlands and the South East also saw their discretionary income dip by 1.6% and 1.3% respectively. Those living in the capital had more money in their pockets compared to the rest of the UK, with the average London family having access to £274 of weekly disposable income.

CEBR economist Rob Harbron said: “Although it remains encouraging that households are no longer seeing sharp declines in discretionary income, December’s Income Tracker figures show that risks remain for UK consumers.”