Household disposable income fell in every part of Britain this year, as millions endure squeezed budgets.
Across Britain, the amount households had to spend after taxes and essential bills in the first three months of 2023 fell 9.2 per cent.
That means the typical household has an average of £213 per week spare, compared to £236 a year ago.
The drop is because prices are rising faster than wages, according to the Asda Income Tracker produced by the Centre for Economics and Business Research.
Cash crisis: Household disposable income fell in every part of the UK in the first quarter
Households in the South East saw the biggest drop in disposable incomes in absolute terms, down by £41 per week, or 18 per cent, annually.
Here, average household disposable income levels fell to £186 a week in the first quarter, down from £227 per week at the same point last year.
People in Wales and Northern Ireland also saw a big drop in disposable income due to soaring living costs.
Northern Ireland recorded the biggest annual fall in percentage terms of any region, with a drop of 21.2 per cent compared to a year ago.
In real terms this means that families in Northern Ireland were £27 per week worse off compared to the same period of 2022.
In Wales, household disposable incomes were 11.6 per cent lower in the first quarter compared to a year earlier, equivalent to a shortfall of £23 per week.
Households in London enjoy the highest weekly disposable income levels, which hover at around the £300 mark.
In the capital, household disposable income has slipped by around £21 compared to a year ago.
‘Get used to it’, Brits told
This week, Bank of England’s top economist Huw Pill said people in the UK need to accept they are poorer, otherwise prices will continue to rise.
Pill told a podcast in the US that there was a ‘reluctance to accept that, yes, we’re all worse off.’
He said in response to higher bills and other costs rising, workers had responded by asking for wage increases and businesses were charging more.
UK inflation, the rate at which prices rise, was 10.1 per cent in the year to March 2023, which is well above the government’s 2 per cent target.
The rate dipped last month from 10.4 per cent. But that does not mean prices are falling – just rising at a slightly slower pace.
Food and non-alcoholic drinks inflation accelerated once more in March, reaching 19.2 per cent, a 45-year high.
Don’t ask for a pay rise! Bank of England Huw Pill said Britons need to accept they are poorer
Income IS rising but gets swallowed up
While household disposable income levels are falling, gross annual income levels are increasing.
Income growth rose faster in the first quarter of 2023, reaching 5.5 per cent, the Asda Income Tracker suggests. Total average household income reached £934 over the period.
The report added: ‘The quarterly acceleration in gross income growth was seen for most regions, with London and the South East being exceptions.
‘All regions saw faster gross income growth in Q1 2023 compared to the same quarter of 2022.
On the rise: Across the UK household incomes have gone up over 5% in the past quarter
Pain at the checkout: Food and drink costs have been surging in recent months
Scotland saw the fastest gross income growth during the period, while the South East of England saw the smallest increase, at 4.7 per cent.
The report said price hikes were spurring workers to push for wage increases – helped by a lack of staff in many sectors.
Average spending on essentials, like accommodation, food and utility bills, came in at £580 per week, while the average being forked out on taxes reached £144 per week.
The price of the basket of goods monitored by the Asda Income Tracker rose by 13.3 per cent in the year to March, exceeding the headline rate of inflation by 3.2 percentage points.
The Centre for Economics and Business Research said it expects overall inflation to fall gradually over the course of the year but stay above 4 per cent this year.
***
Read more at DailyMail.co.uk