A game of endurance as disposable incomes hit six year low

13th March 2018

The average household in Britain is currently enduring the lengthiest dip in disposable income for six years. Cash-strapped consumers are struggling with the combination of lacklustre growth in their wages, which is providing modest support to disposable incomes, and inflation, which is taking its toll on the pound in their pocket as the cost of everyday items increase.

Recent data from the Office for National Statistics (ONS) revealed real household disposable income fell by 1.1% per head in the second quarter of 2017, meaning disposable incomes have declined for four consecutive quarters, marking the longest period of negative growth since the tail end of 2011.

The data from the ONS coincides with a study1 disclosing that for the first time in two years, households said they thought their personal financial situation had deteriorated. This perception will no doubt have a negative impact on people’s saving and spending habits.

It is anticipated that the interest rate rise in November could help temper rising inflation, which has been fuelled further by the Brexit-hit pound. Watch this space.

1Eurobarometer Consumer Survey, Oct 2017


The above is purely market commentary and does not constitute financial advice.