Retailers set for bank holiday boost as household disposable income rises 9.7%

The average UK family had £190 in disposable income to spend last month, up £17 on the year and £1 on the month, according to the Asda Income Tracker.

But the 9.7% jump in spending power was the slowest rate of growth in five months, driven by a slowdown in employment growth.

Food and drink prices fell 2.7% in July compared with the same period in 2014, sparking hopes that Brits will give a much-needed boost to the grocers by stocking up on supplies for days at the beach and barbecues during the bank holiday weekend.

With some wet and windy weather forecast over the weekend, DIY retailers could also benefit after the price of home furnishings fell 2.8% on the year.

But consumers could opt to use their 9.7% increase in spending power to fund leisure activities and days out after the price of fuels fell 11.4% compared with July 2014.

Asda chief executive Andy Clarke said: “As the summer holidays draw to an end, families everywhere are likely to be planning how to make the most of the August bank holiday and this month’s Income Tracker brings yet more good news to what has already been a positive summer for household budgets.

“Our customers continue to tell us they’re enjoying spending money on the things they want to do rather than need to do, so it’s reassuring to see that food inflation continues to be in decline and diesel prices are falling across the country. I’m sure this will be a further welcome relief to those planning a weekend getaway and those holding the purse strings.”

Cebr economist Sam Alderson added: “The summer holiday period can be a difficult time for household finances; particularly for those families with children to look after during the school holiday break.

“With spending power rising, the summer season has hit full swing and spending on leisure activities has grown strongly. Hopefully, this has helped to ease some of the other stresses parents face in the lead up to the bank holiday.”