Households continue to face mounting financial pressure, with rising living costs still outstripping wage growth across much of the country, according to the latest Asda Income Tracker.
The report says in September the average UK household had £254 in weekly discretionary income £2.81 higher than a year earlier, but marking the first acceleration in growth since December 2024.
Despite the uptick, inflation remains high at 3.8%, the joint-highest level since January 2024, leaving many lower and middle-income families struggling to keep up with essential costs.
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The report also says 60% of households in these income brackets saw a fall in discretionary spending power, while the lowest-income families faced an average shortfall of £73 per week.
Regionally, seven out of twelve UK areas were worse off than a year ago.
The West Midlands saw the steepest drop in weekly discretionary income, down £7.70 to £193, while London households retained the highest spending power at £334 per week.
Northern Ireland remained the lowest at £130.
Annual gross income growth also weakened across most regions, with manufacturing hubs such as the West Midlands, Yorkshire and the Humber, and the North West hit particularly hard by US export tariffs.
Sam Miley, head of forecasting and thought leadership at Cebr, said: “While inflation has held at nearly twice the Bank of England’s target, certain essential spending categories such as food are starting to see a slowdown in price rises, which will be welcomed by consumers.
“The upcoming November Budget has also hinted at further support for household energy bills, which could be an additional cause for optimism heading into the fourth quarter of 2025. That said, with the UK labour market cooling, the risk of a contraction heading into the new year cannot be ignored.”
Asda said it remains committed to supporting shoppers through its ongoing Asda Price promise.
The retailer has recently introduced thousands of new price cuts through its Rollback campaign, covering household staples and own-label products.
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