The average UK household’s spending power increased marginally for the first time in 10 months, according to Asda’s Income Tracker, which is compiled by the supermarket and Cebr to benchmark families’ disposable incomes.

It showed that in September, the average UK household had £254 in weekly discretionary income, up +£2.81 year-on-year, marking the first acceleration in growth since December 2024.

However, with rising living costs outpacing wage growth across much of the country, it said many consumers remain squeezed.

It also warned that with inflation remaining stubbornly high at +3.8% – the joint-highest level since January 2024 – the financial burden facing lower-and middle-income families is showing little sign of easing.

The Tracker estimates that 60% of lower- to middle-income households saw a decline in discretionary income, as essential spending continues to rise faster than post-tax income.

“While inflation has held at nearly twice the Bank of England’s target, certain essential spending categories, such as food, are starting to see a slowdown in price rises, which will be welcomed by consumers,” Sam Miley, Head of Forecasting and Thought Leadership at Cebr, said.

“The upcoming November Budget has also hinted at further support for household energy bills, which could be an additional cause for optimism heading into the fourth quarter of 2025,” Miley added.

However, he caveated that “with the UK labour market cooling, the risk of a contraction heading into the new year cannot be ignored.”