Rising cost of food, fuel and utilities leaves lowest-earning group with cash shortfall
Two in five UK households (40 per cent) saw their spending power growth fall in June, according to the latest Asda Income Tracker.
The figures come as inflation rose to 3.6 per cent during the month, which represents the highest rate since January 2024, and the impact continues to be felt most by the lowest-earning households.
That group’s spending power growth dropped by 8.1 per cent year on year, leaving them with a weekly shortfall of £74 between what they earn and what they need to cover essential bills and everyday costs.
The most significant drivers behind the rise in inflation were increases in everyday essential categories such as food, fuel, and utilities.
While the impact of these increases is especially stark for lower-income families who spend a greater share of income on these basics, the effects are also being felt unevenly across the UK, according to Asda.
Households in some regions such as the West Midlands saw their spending power growth shrink by 0.6 per cent, compared to 12 per cent growth in the same period last year. This left families in the region with an average disposable income of £191 a week – far below the UK average of £250 per week.
However, this is still significantly higher than Northern Ireland, which continues to record the lowest disposable income figure of £129 per week.
By contrast, spending power in London (£326), Scotland (£261) and the east of England (£267) remain above the UK average, with higher post-tax income and stronger job markets helping to protect households in these regions from rising prices.
Sam Miley, head of forecasting and thought leadership at Cebr, said: “Inflation surprised to the upside in June, putting further downward pressure on the rate of growth in the Income Tracker. The concentration of inflation in essential categories, including food, transport, and utilities, is placing households under particular strain. Nevertheless, earnings growth remains robust and is offsetting price pressures for now.”
