Potentially good news for UK retail: disposable incomes are on the rise. Families are now better off than they were before the pandemic, according to value supermarket giant Asda and its latest Income Tracker, which has recorded the strongest quarterly growth since Q2 2021.

UK-wide disposable income averaged £237 a week during the quarter with London leading the way with average disposable income hitting £351 a week, 3% up on the £340 recorded in March 2021, thanks to above-average wage growth in the capital.

Only two other regions, Scotland and East of England, had average household disposable incomes above the UK-wide average during the quarter at £238 and £261 a week, respectively, the tracker noted. 

While these were the only regions to record values above the UK average, the tracker grew by 13.5% on the year “marking the strongest quarterly growth in three years”. 

This was largely driven by a sharp slowdown in inflation during the quarter, with easing financial pressure on UK households and all regions now reporting slowdown in the cost of essentials.

Sam Miley, Managing Economist and Forecasting Lead at CEBR, which produces the Income Tracker for Asda, said: “Though inflation may pick up slightly in the coming months, it is still expected to fall short of income growth for some time. This means that improvements in spending power are set to continue, supporting consumption and the wider economy.”