The Nation basks in no-flation
Friday feeling for families across the UK as household spending power sees double-digit growth
“No-flation" brought good news to families across the UK as Asda's latest Income Tracker revealed that Brits were £16 better off in March than they were during the same time last year – an increase of 9.7%. Families now have £185 a week to spend on the things they want rather than the items they need.
The UK continued to enjoy "No-flation"– as inflation remained at 0.0, its lowest level in 55 years thanks in large part to the falling cost of clothes and shoes. The drop in the cost of these items, which fell by 0.2% over the 12 last months, will be welcome news for people looking to spring clean their wardrobes and refresh their closets in time for the summer sun.
Families are also beginning to benefit from falling gas prices, which also helped to drive inflation down to Zero last month, after falling 4.2% over the last 12 months. The fall means that households are finally reaping the rewards from promises made by gas companies at the beginning of the year to drop their prices.
Commenting on the findings, President and CEO of Asda, Andy Clarke, said:
“Wherever you live in the UK this month’s tracker brings more positive news for those holding the purse strings. Eighteen months of continuous growth is good news for people living in all corners of the country and seeing this growth rise fastest in areas such as Northern Ireland and The Midlands supports my belief this recovery is real and sustainable.
“The economy continues to roll on the road of recovery and the gap between regional disparities reduces. But what continues to interest me is the change in spending habits - I know from speaking to our customers they feel more confident than one year ago but they are still bruised from the recession therefore more prudent with their spending.”
It was great news across the regions too, which saw double-digit growth across the UK, compared to this time last year, showing that the recovery is being firmly felt nationwide.
- Northern Ireland saw its spending power grow by a record 14.8% meaning families were £12 a week better off than they were this time last year. This rapid jump was mainly due to the falling cost of filling up the tank in a region which spends more at the pumps than anywhere else in the UK
- Thanks to demand for local labour in the North West and Yorkshire & Humber, which has brought unemployment down by 1.6 and 1.8 percentage points respectively, families in the North West region have seen their discretionary incomes rise by 11.3% and in Yorkshire & Humber by 11.2% year on year, that’s an increase of £17. This means that they now have £165 and £164 a week
- In the capital, families enjoyed the biggest boost to their incomes over the last quarter as spending power grew £19 compared to a national average of £16. This means that Londoners now have a record £248 in their pockets
- In Scotland, spending power also grew in the first quarter of this year, rising by £12 and marking a 6.8% increase when compared to the same time last year. This was thanks to the falling cost of essential items which eased the pressure on families in the region
Sam Alderson, Economist, Cebr, added:
“Price falls in key sections of household purchases have helped to relieve pressure on finances across the UK. Family spending power has now risen year on year for 18 consecutive months. With the outlook for inflation looking subdued for much of the year, households should see further recoveries in their finances through 2015.”