According to two reports, the levels of consumer confidence slowed down last month, as household incomes were hit by high costs of gas and electricity.
The latest report from the ASDA Income Tracker revealed that the prices of household utilities — gas, fuel and electricity — have stayed high when compared to the costs last year. The result of this is that it has hit on peoples discretionary income.
The reports have been published amongst the calls from consumer watchdogs for utility firms to reduce their prices, as households are suffering and struggling to pay their bills. According to the ASDA report, the average household in June in the UK had a discretionary income of £171 a week, which is £1 more than the same time last year. The is ninth time in a row that the rate has risen, but it is at a considerably slower rate when compared to previous months.
The ASDA report offers a very scrambled picture across the regions of the country, with the East and West Midlands exceeding the trend, with a rise of £6 and £7 respectively, but in the South West, it showed that the income had dropped by £1. Yorkshire and Humberside showed increases of £2 a week, which is above the national average. London was one of the biggest surprises, staying in line with the nation average of a £1 increase. ASDA said that this is due to the fact that residents of The Big Smoke rely on jobs in the finance and business services sector, which has continued to fall victim to year-on-year reductions in average pay. Scotland demonstrated a similar picture to London.
ASDA said that even though families were shown to be better off than the month before, they were finding that their discretionary incomes were unable to increase due to three common factors: gas, fuel and electricity prices being higher than the previous year, an increase in inflation on essential items and a slow growth in wages.
Andy Clarke, the President and CEO of ASDA said
This month’s income tracker is a tale of two halves. Whilst we are seeing the ninth consecutive month of growth – this growth is slowing. And over the past month families have not felt the same level of benefit in their household budgets that the positive headlines about economic recovery that we’ve seen in recent weeks would suggest. Whilst some regions continue to step on in their economic recovery, others have actually seen a step back this quarter indicating that recovery still remains a postcode lottery. Although I know that for shoppers a pound a week extra in their pockets will still make a difference, equally, we must recognise that, as a week of sunshine doesn’t make a summer, there will need to be greater, prolonged consistency in our economic indicators before we can claim a full recovery.