Family spending power rises but pace of growth slows

The level of disposable income among families in Northern Ireland has shown the strongest growth among all regions of the UK, but at £98 per week leaves the province still sitting at the bottom of the national table.
By The Newsroom
Published 28th Jan 2016, 06:00 BST
Falling prices at the pumps have played a major factor in freeing up cash for familiesFalling prices at the pumps have played a major factor in freeing up cash for families
Falling prices at the pumps have played a major factor in freeing up cash for families

The information is contained in the latest income tracker report from retailer Asda and shows that in the inal quarter of 2015, there was a 10.5% rise, the strongest year-on-year growth of all UK regions.

However, the data clearly shows once again that the province is still trailing other regions against and UK overall average of £194.

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The Tracker, compiled by CEBR also reveals that the pace of growth has slowed considerably from the 15.1% rate recorded in Q3. This reflects the UK trend (7.2% y-o-y growth and lowest percentage increase since October 2014) and was largely due to the recent slowdown in wage growth and a slight increase in inflation.

However, continued falls in the price of some essential items combined with further growth in employment in NI’s labour market have helped to maintain double digit growth in the latest quarter.

Regionally, the disparity in weekly spending power is huge with households in London leading the way with discretionary income reaching £259 – up 5.8% year-on-year. However, an impressive £20 a week rise for families in the East of England over the past year led to disposable income reaching £218, and it closing the gap on London.

In Scotland, the outlook was a little less positive, with slowing wage increases reducing the rate of disposable income growth to 5.6%, 1.6% lower than the national average.

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Across the country, inflation reached its highest level (0.2%) since January 2015. However, the overall rate of inflation for the last twelve months stood at 0% - the lowest annual level since 1950, when records began. In addition to this, essential item inflation remained negative at -0.1%, with shoppers able to make the most of a fall in food prices between November and December (0.2%); helping to ease stress around entertaining expenditure in the lead up to the busy festive season.

“Throughout 2015, falls in commodity prices and a strengthening pound contributed to higher discretionary income in households across the UK,” said Asda CEO Andy Clarke.

“We’ve also passed a milestone for the British economy, with inflation remaining at zero for a full calendar year for the first time since records began. Despite these positive economic indicators, spending patterns remain erratic. Although falling vehicle fuel costs are putting extra pounds in consumers’ pockets, this doesn’t necessarily translate to an increase in household spending.”

“It’s encouraging to see that the regional picture was positive overall, but with varying contributing factors. Northern Ireland again experienced the fastest growth in discretionary income, but still remained disproportionately behind the rest of the UK. In comparison Scotland’s growth slowed as a result of increased pressure on the public sector and the price of oil.”

Related topics:ASDANorthern IrelandScotlandLondonEast of England