Rising inflation could subdue household spending this Christmas, according to Asda’s latest Income Tracker.

The supermarket giant’s tracker, which measures household disposable income, fell for only the second time this year, decreasing by £1.98 in October, leaving the average UK household with £247 per week.

The 2.3% rise in inflation which was primarily driven by higher energy prices, has led Cebr, which produces the tracker on behalf of Asda, to predict that households will face “dampened spending power over the festive period”.

Lower income households saw the slowest growth in disposable income since January at just 1.6%, with their net income not covering the cost of bills and essential spending, and leaving them with an average weekly shortfall of £69.

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Across age groups, those aged 30 to 49 experienced the fastest annual rise in the cost of essential spending, which increased by 3.8% to £765 in October.

The rise in essential spending also saw these households record the weakest growth of any age group with their disposable income only increasing at 5.5% to £298 per week in October – their weakest growth since January.

Cebr expects the inflation rate is expected to remain above target for the rest of the year.

Cebr managing economist and forecasting lead Sam Miley said: “October’s reading was only the second time this year that the Income Tracker reading has fallen on the month.

“This was largely expected, given the increase in the Ofgem price cap that took place at the start of the month, bringing higher energy bills. These increased energy prices will persist over the rest of Q4, leading to slightly dampened spending power over the festive period.”

It comes as Asda has pledged to invest almost £1m through grants and new in-store initiatives to spark conversations and tackle loneliness for the over 60s this festive season.