Consumer price inflation fell in June from 4.5% in May to 4.2%, slightly easing the pressure on real household incomes with a drop in the price of discretionary items. However, this is unlikely to signify the start of a downward trend, with the price of essential goods and services continuing to grow.
The tough outlook persists as the rising costs of basics continue to put pressure on family budgets. Transport costs were again the strongest contributor to the headline rate of inflation in June, with the cost of getting around now up to 16% higher than a year ago.
Andy Clarke, Asda president and CEO, said: “Nationally, shoppers’ disposable incomes are still down year-on-year. While it’s a relief to see a significant improvement on last month’s record drop, only time will tell whether this is a one month blip or the beginning of a trend. While spending power dropped everywhere, the fall in London and the southeast was relatively mild.”
Charles Davis managing economist, Cebr said: “The Asda income tracker shows that spending power remains down on a year ago as the price of essential goods continues to rise. Utility price increases later in the year mean the UK consumer is not out of the woods yet and we could see inflation rising again over the coming months.”
Source: Asda
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