The results of Asda’s latest Income Tracker survey were released this week. According to their figures, households had £11 a week less to spend in July than they did in June. Compared with July last year, there was a 6.4% drop in the amount of discretionary weekly income households have available to spend.
Figures from the AA indicate that there has been a 16.5% increase in the cost of travelling, and this will only get worse with rail fares set to increase by an average of 8% in January. Furthermore, the cost of food remains high, the cost of clothing and footwear has increased by 3.1% year on year, and utility bills have risen by 4.6% in the last 12 months.
Commenting on the latest survey, Asda’s chief executive Andy Clarke said that “the rising cost of feeding the family, getting around and increasing unemployment add up to the biggest squeeze on families since the last recession.” The report also noted that measures being taken to reduce spending include people only filling their petrol tanks halfway, and people cutting their own hair instead of paying someone else to do it.
Charles Davis, managing economist at the Centre for Economics and Business, said: “Pressure on household finances continued to mount up in July as the cost of essential spending grows rapidly while wage increases remain slow.” The think tank has slashed its own global growth forecast for the year ahead from 3.4% to 3%, suggesting the tough times are set to continue.