November’s rise in inflation is expected to dampen Christmas spirits and restrict spending ahead of the big day, according to the latest figures from Asda’s income tracker.
The period marked a second consecutive month of faster price rises, according to the supermarket’s tracker, despite households being better off than last year.
The Consumer Price Index (CPI) rose to 2.6% in November, up from 1.7% in September and 2.3% in October, driven by higher clothing and footwear prices and the transport sector.
CEBR, who produce the income tracker on behalf of the grocer, forecast that inflation was set to remain above the 2.0% target in the coming months, with energy prices and wage growth responsible for driving further higher essential costs.
Despite inflationary pressures, household spending power is continuing to improve year-on-year.
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Cebr managing economist and forecasting lead Sam Miley said: “The Income Tracker saw a slowdown in growth in November, driven by accelerating inflation. That said, spending power has continued to increase, with the Tracker having exhibited double-digit growth for sixth consecutive months.
“Spending power amongst households has seen a gradual improvement throughout the year, which is welcomed ahead of the festive period. Nevertheless, consumer expenditure over Christmas is still expected to be held back relative to pre-pandemic levels amidst elevated inflation and the lingering effects of the cost-of-living crisis.”
The figures come after Asda recently brought back its 15p festive veg sale as it geared up for the big day.
From 19 December until 24 December, shoppers at Asda will be able to purchase 1kg carrots (currently 69p), 500g sprouts (currently 85p), 360g broccoli (currently 79p) and 500g parsnips (currently 75p) for 15p each instore and online.
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