November’s sharp rise in inflation is expected to dampen festive spirits and restrict spending despite household’s being better off compared with last year, warned a recent report.
November marked a second consecutive month of faster price rises according to the latest figures from Asda’s Income Tracker published on Monday (23), with families across the UK continuing to face rising inflationary pressures.
The Consumer Price Index (CPI) accelerated to 2.6 per cent in November – up from 1.7 per cent in September and 2.3 per cent in October – driven by the transport sector and higher clothing and footwear prices.
CEBR, who produce the Income Tracker on behalf of Asda, has forecast that inflation is set to remain above the 2.0 per cent target in the coming months, with energy prices and wage growth responsible for driving further higher essential costs.
Despite inflationary pressures, household spending power continues to improve year-on-year. Average household disposable incomes grew by 10.5 per cent in November, marking six consecutive months of double-digit increases.
The average UK household was £23.74 per week better off in November compared to a year earlier and had £249 per week to spend after paying bills and essentials, providing some relief for families as they get ready for the big day.
Reacting to this month’s Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at CEBR, said, “The Income Tracker saw a slowdown in growth in November, driven by accelerating inflation.
"That said, spending power has continued to increase, with the Tracker having exhibited double-digit growth for sixth consecutive months.
“Spending power amongst households has seen a gradual improvement throughout the year, which is welcomed ahead of the festive period.
"Nevertheless, consumer expenditure over Christmas is still expected to be held back relative to pre-pandemic levels amidst elevated inflation and the lingering effects of the cost-of-living crisis.”
