Family spending power at lowest level in two years

Families in Northern Ireland continue to fall under the greatest spending pressure against the rest of the UK
Families in Northern Ireland continue to fall under the greatest spending pressure against the rest of the UK

Low wage growth and Northern Ireland’s ongoing reliance on public sector employment have been blamed as factors in the latest fall in family spending power in the province.

The latest figures from the widely regarded Asda Income Tracker reveal that discretionary income - that left over after money spent on food and bills - fell to just £97 per week in the second quarter of the year.

The figure is the lowest level since the last quarter of 2015 and following a decrease of -0.8% in the first quarter 2017, shows a decline in family spending power of 4.6% £4.60 per week compared to the same quarter a year earlier.

The fall is mirrored across the UK, the singular difference being that the average across the country as a whole is £198.

With families facing additional expenses during the summer holiday, the survey said the recent slowdown in inflation was to be welcomed.

However, it said a fall in fuel prices had been countered by rising food costs.

ional pressure on household budgets were electricity, with a rate of inflation of 7.7% in June, and alcohol and tobacco, for which prices increased by 5.1% year-on-year.

While the employment rate across the UK has risen to an all-time high of 74.9%, it said wage growth has not yet followed this trend and, with inflation still higher than wage growth, the pressure continues to mount on families’ spending power.

London households remained ahead of the UK average with £266 of spending power per week, though they they are still £1.20 worse off than the same period last year.

Families in the North East however bucked the trend and saw the greatest growth in the second quarter, a £3.80 gain year-on-year. Yorkshire and the Humber and the North West were the other two regions that saw positive growth for families’ discretionary income year on year.

Kay Neufeld, economist at Cebr, said: “In June, the Income Tracker shows that family spending power has decreased for the third consecutive month. Although lower inflation in June eases the pressure on households’ budget somewhat, rising food prices continue to drive up the cost of essential spending.

“On a regional level, this reversal of fortunes for households was most pronounced in Northern Ireland and Wales due to higher unemployment and weaker wage growth compared to other regions.”