Rising prices, falling wages
More bad news for domestic economic confidence with today’s Asda Income Tracker, which reports the
Biggest ever drop in family spending power as prices increase twice as fast as income
The Tracker measures families’ discretionary spending power – how much is left to an average household after deducting taxes and basic items like groceries, fuel, transport and mortgage payments. Currently this produces a weekly figure of £165, down from £179 12 months ago, an annual fall of more than £700 and the lowest figure since October 2008.The fall is largest ever, and Asda blame it on income growth running at less than half the rate of inflation.
This follows yesterday’s Markit Household Finance Index, which reported the
Sharpest deterioration in household finances for over two years.
The June survey showed that 36% of households saw their finances deteriorate in the previous month, but only 6% saw an improvement; the lower the income of a family, the more likely it was to report a deterioration. 50% of households now expect their position to get worse over the next 12 months, compared with 19% who expect it to get better.
The Council of Mortgage Lenders reported a slight improvement in gross mortgage lending, compared with 12 months previously – but only if remortgaging is included. If the figures are restricted to lending for new propoerties, then lending to date is still below 2010 levels.