Discretionary income rose by the fastest pace since November 2012 as consumers began to feel the benefits of a tentatively recovering economy.
Family spending power, as measured by the Asda income tracker, was up £5 a week year-on-year in February but remained below the all time high of £174 seen in January 2010.
Regular earnings growth (exc bonuses) was still below inflation at 1.3 per cent while food costs rose 1.8 per cent.
“Even though a further drop in things such as essential item inflation and the price of fuel may help to slightly ease the burden, confidence in a full recovery remains low,” said Andy Clarke, Asda President and CEO.
The income tracker takes a consumers’ total household income (wages, investment income, pensions), subtracts taxes and cost of living (food, clothing, transport etc) resulting in a ‘family spending power’ figure.
He added: “The budget has addressed some concerns around spiraling energy bills and childcare costs… but these benefits now need to reach the pockets of customers throughout the UK to truly make a difference.”
Rob Harbron, Senior Economist, Cebr commented: “The slowdown in inflation is helping to ease the pressure on household budgets, while the economic recovery is finally starting to feed through into wage growth, which is now starting to accelerate.”