Title : One fifth of UK households had 'negative disposable income' in June, says Asda

Jul 25, 2022 04:56AM ET

By: AnalysisWatch

A fifth of British households had "negative disposable income" last month, with a shortfall between what they earned and what they needed to spend on essentials, British supermarket group Asda said Monday.

British consumer confidence levels are at record lows as they struggle with the accelerating cost of living. Wages are failing to keep pace with inflation, which hit a 40-year high of 9.4% in June and is heading for double digits.

Low-income families are suffering the most.

The Asda Income Tracker report shows that 20% of UK households had negative disposable income in June—an average shortfall of £60 ($71.91) a week between what they earn and what they need to spend on essential bills for food, electricity, gas, transport, mortgage interest payments, or rent.

Data from Asda, the UK's third largest supermarket behind market leader Tesco (OTC: TSDY) and Sainsbury's, showed a record 18% year-on-year fall in average household disposable income from £43.95 a week in June, which equates to £175.80 a month.

The average household had £200 a week left after paying for essentials, a figure that has fallen for eight consecutive months to a level last seen in December 2017.

In response to the downturn, Britons are reducing their shopping in both stores and products, switching from conventional supermarkets to discount stores and from branded goods to lower-priced private-label products.

They are also cutting back on fuel purchases, reducing the number of car journeys, buying fewer takeaway foods, canceling streaming services and cancelling appliance repair warranties.