Mortgage News
Record squeeze hits household budgets
Consumers’ spending power continued to deteriorate in March, falling by 1.1% on a year earlier after inflation, its lowest level since February 2011, research from Lloyds TSB has found.
In its Spending Power report, it said this equated to £113 less a year for households to spend on non-essential items.
Spending on essentials is rising at its fastest rate since the records began in June 2010 at 6.2% annually, largely driven by an increase in food and drink, gas and electricity bills and debt payments, said the lender.
Meanwhile, income growth remains below inflation and has slowed to its weakest rate in more than a year, to 2.4% from 12 months ago.
Patrick Foley, chief economist at Lloyds TSB, said: “Although overall inflation declined in the five months to March, prices of essentials are rising at an increasing rate, whilst at the same time growth in incomes has slowed.”
Nearly three quarters of those surveyed had noticed an increase in the cost of essentials and everyday spending, while just 19% believe costs have remained the same or decreased.
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