UK household budgets decreased for the first time since 2023 in March as rising costs and global supply chain uncertainty impact finances according to the latest Asda Income Tracker.

The Asda tracker found that household discretionary income reduced by £5.32 a week compared to February, which left families with an average of £257 after covering bills and essentials.

This figure marks the first year-on-year decline in three years which shows a shift after a period of improving finances.

The pressure was driven by the rising inflation over March due to the current market volatility following the ongoing conflict in the Middle East.

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Sam Miley, head of forecasting and thought leadership at Cebr, said: “Q1 2026 marked another quarter of steady growth in the Income Tracker, driven primarily by easing inflation in January and February amidst weak earnings growth.

“Data for March have given the first indications of how UK consumers are likely to be affected by ongoing supply disruptions from war in the Middle East.

“With disruption ongoing and no end in sight, further contractions in the Income Tracker seem likely over the rest of 2026.”

For the lowest-earning household, the gap for essential spending and net income increased, which led to a £74 shortfall, close to the low of a £76 shortfall during the 2022/23 cost-of-living crisis.

There are further contractions expected in the upcoming months for the Income Tracker, and the continued commodity price fluctuations are expected to keep inflationary pressures high.