Growth in discretionary incomes is accelerating in the East Midlands rising to 4.8 per cent in Q1 2014, up from 3.8 per cent in Q4 2013
The increase in spending power was driven by unemployment falling year on year by 0.6 percentage points in the three months to February, and a slowdown in the UK-wide rate of inflation thanks to a huge fall of 6.6% in petrol prices
The latest Asda Income Tracker has revealed that the effects of the economic recovery are starting to be felt across the UK with families in the East Midlands having £7 a week more discretionary income in Q1 2014 than in the same month the year before.
According to the latest figures, released today, the average family in The East Midlands had £150 a week of discretionary income in Q1 2014 – 4.8% more compared to the same month last year. The rise in discretionary income in the East Midlands – the income left once taxes and the spend on essentials like rent, utilities and bills have been deducted – comes alongside the largest UK-wide increase seen since September 2012, boosted by rising wages, falling unemployment and a slowdown in the rate of inflation.
The average UK family had £170 a week of discretionary income in March 2014 - 4.3% more compared to the same month last year – and edging closer to the record high of £174 seen in January 2010. The rise in household spending power, which has been slowly increasing every month since October, highlights that families across the UK are beginning to see the economic recovery translate into more money in their pockets.
Falling unemployment, which has now dropped below 7% for the first time since 2009, helped to boost household finances with more than 30 million people now in work - 691,000 more than last year. In addition to more people in work, family spending power was also supported by rising wage growth. The rate of inflation slowed even further in March, dropping well beneath the 2% Bank of England target to 1.6%, helped in large part by a 6.6% year on year fall in the cost of petrol.
Commenting on the findings, President and CEO of Asda, Andy Clarke, said:
“With disposable incomes increasing for the sixth month in a row, there is now real momentum behind the economic recovery.
“The key economic indicators are now pointing to positive growth, spending power is growing and unemployment is falling. But, importantly these factors are combined with a fall in the price of petrol and food inflation, meaning that families will have more breathing space when balancing the budget.
“In recent months I have been keen to point out that recovery cannot just be focussed on London and the South East – which is why I am delighted to see that this month, regions like the East Midlands are finally enjoying a step on in their recovery.”
Rob Harbron, Senior Economist, Cebr, said:
“It is encouraging to see a further increase in household spending power, as the Asda Income Tracker saw its fastest growth rate since late 2012.”
“A slowdown in inflation coupled with accelerating wage growth is helping to raise the average household spending power. Moreover, robust economic growth is expected to continue, which means it is likely that discretionary incomes will continue to rise over the coming months.”