Eight in 10 British households suffered a drop in their disposable incomes last month as rising living costs continue to weigh on spending.
In the latest sign of the UK’s inflationary crisis, supermarket chain Asda’s income tracker also showed that 40% of households are in negative income territory — where take-home-pay doesn’t cover bills and essentials. The average shortfall for those families was £42.50 ($54.16) a week in May.
Consumers are still battling against stubborn cost pressures in the UK with the consumer prices index rising the same amount in May as the previous month. A larger-than-expected Bank of England rate rise last week sent shock-waves through the economy and drove up the cost of mortgages.
The effect of inflation on shoppers is particularly pronounced in food retailing and supermarket representatives from Tesco Plc, J Sainsbury Plc, Asda and Morrisons are set to answer questions on pricing Tuesday in front of Members of Parliament on the business committee.
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On average households had £207 a week of disposable income, the second lowest reading since October, Asda said. By contrast, higher-income households saw disposable income rise in May for the second month in a row to an average £754 a week.
The data for Asda’s income tracker is gathered by the Centre for Economics and Business Research, a UK consulting firm.
