November’s rise in inflation is expected to restrict Christmas spending, despite households being better off compared with last year, according to Asda.

The supermarket’s latest monthly Income Tracker found that November marked a second consecutive month of faster price rises, with families across the UK continuing to face increasing inflationary pressures.

The Consumer Price Index (CPI) accelerated to 2.6% in November – up from 1.7% in September and 2.3% in October, and Cebr, which produces the Income Tracker on behalf of the grocer, has forecast that inflation is set to remain above the 2% target in the coming months, with energy prices and wage growth responsible for driving further higher essential costs.

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Despite inflationary pressures, Asda found that household spending power continues to improve year-on-year, as average household disposable incomes grew by 10.5% in November, marking six consecutive months of double-digit increases.

The average UK household was £23.74 per week better off in November compared to a year earlier and had £249 per week to spend after paying bills and essentials.

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.”