Asda warns of continued fall in UK household spending power

Core Insights - Lower and middle-income households in the UK experienced a decline in spending power for the fourth consecutive month in October 2026, with 60% of families reporting reduced disposable income [1][2] - Approximately 20% of households with annual incomes around £11,000 ($14,405) faced an average weekly deficit of £74, making it difficult to cover basic living costs [1][2] - Inflation showed its first annual slowdown since May 2025, easing to 3.6% in October, but still above the Bank of England's target, with housing and utilities being the primary inflation drivers [3][4] Income and Spending Analysis - Households earning roughly £25,000 a year were left with only £10 a week after essential expenses, while those with annual earnings of about £41,000 retained £90 [2] - The cost of essential goods and services monitored in the income tracker was 4.6% higher than the previous year, with households headed by individuals aged 30 to 49 being the most affected [4] - Average weekly essential spending for this demographic was £799, with monthly tax bills averaging £281 [4] Economic Outlook - Sam Miley from Cebr indicated that while inflation data suggests that inflationary pressures may have peaked, there are significant risks to the income tracker outlook due to a weakened labor market and increased employment costs [5] - In November 2025, Asda raised £568 million ($743 million) through the sale and leaseback of 24 supermarket sites and a distribution depot, indicating strategic financial maneuvers in response to market conditions [5][6]