Essential spending continues to rise at its fastest pace in over a year and a half, up 4.6% year on year in December.
Spending on utilities, in particular, is squeezing household budgets: spending on gas and electricity was up 9.3% in December from a year ago.
As a result, spending power and consumer sentiment still remain at low levels, although both improved slightly in December.
Spending power rose 0.4%, after inflation, in the year to December; indicating that consumers are still
feeling considerable strain on their finances.
At the same time incomes were still growing below the rate of inflation. December saw a 3.8% annual increase, which is a real terms fall of 0.8%.
However, the number of consumers who say that they have money left over after they have covered all monthly outgoings has been rising steadily. Similarly the number looking to save surplus income is also increasing.