Asda Income Tracker: Household Income Growing Faster Than Prices

Figures from Asda’s Income Tracker supplied by CEBR reveal the cost of essential basket of goods and services* rose by 4.2% year-on-year in January – marking the fastest rise in the cost of essentials since March 2024.

Annual inflation is behind recent price increases, having risen to a 10-month high of 3% in January. This was driven largely by faster price rises in transport, as well as food and non-alcoholic beverages – with prices of staple products such as bread, cereals and meat products particularly impacted by inflation.

In January, the average household disposable income reached £254 per week – an increase of £25.74 per week year-on-year.

However, while gross income growth remains above inflation, its slowdown in January to +5.2% will add further constraints to household budgets.

The lowest-earning households (approximately 20% of all UK households) were most affected by rising inflationary pressures. This group faced a shortfall of £69 per week in January, meaning their take home pay was not enough to cover bills and essentials. Younger working households are set to be the hardest hit, as they typically earn less yet still face the same essential costs as other households.

Inflation is predicted to remain above target for the rest of the year, with the increases in the energy price cap likely to sustain these elevated inflation rates. Ofgem announced today that the typical household energy bill will rise by £111 per year in April, dealing a further blow to households.

Despite the uptick in inflation, CEBR – who produce the Income Tracker on behalf of Asda – have given some cause for optimism, as household incomes continue to grow at a faster rate than prices are increasing.

Sam Miley, Managing Economist and Forecasting Lead at Cebr, said: “Inflation accelerated to a near-term high of 3.0% in January. Given that the change in the rate of price growth was particularly stark across essential spending categories, such as food and transport, households have experienced some pressure on their costs at the start of the year.

Nevertheless, household incomes are growing at a faster pace than prices, and this trend is expected to persist throughout 2025 as households continue to recover from the worst of the cost-of-living crisis.”

With the higher cost of essentials squeezing household budgets in January, Asda continues to deliver unbeatable value for hardworking families.

Asda recently launched Rollback, cutting prices on more than 4,000 popular products both in stores and online by an average discount of 25%. Asda now offers even greater value as it continues on its mission to be the lowest priced traditional supermarket.

You can view the full Income Tracker here.

Source : Asda

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