November’s inflation uptick is expected to impact holiday spending according to Asda’s latest income tracker.
- The Consumer Price Index saw a significant rise, moving from 1.7% in September to 2.6% in November.
- This increase was primarily due to higher costs in clothing, footwear, and transportation sectors.
- CEBR anticipates continued inflation above the 2.0% target, driven by energy prices and wage dynamics.
- Despite these pressures, household spending power has improved compared to the previous year.
November has brought an unwelcome rise in inflation that could dampen holiday spending, according to the recent data from Asda’s income tracker. The Consumer Price Index surged to 2.6% in November, a notable increase from 1.7% in September and 2.3% in October. This escalation is largely attributed to the rising costs in clothing, footwear, and transport sectors, which are impacting household budgets.
The Center for Economics and Business Research (CEBR), responsible for compiling the income tracker, forecasts that inflation will continue to exceed the 2.0% target in the upcoming months. Key factors contributing to this persistent inflation include elevated energy prices and changes in wage growth.
Although inflationary pressures are mounting, there is a silver lining in terms of household spending power. The data reveals that, despite the challenges, spending capability has shown year-on-year improvement. As Sam Miley, CEBR’s managing economist, stated, ‘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.’ This improvement is viewed favorably as it precedes the festive period.
However, it is important to note that consumer spending during Christmas is expected to remain subdued compared to pre-pandemic levels. Persistent inflation and the lingering effects of the cost-of-living crisis continue to pose a challenge to consumer expenditure this season. From December 19 to December 24, shoppers will have access to Asda’s seasonal offer on select vegetables, a move that reflects adaptation to these economic pressures.
The current inflation trend indicates a challenging holiday season, yet household spending resilience offers a small reprieve.
