Families in the Northern region continue to have less discretionary income than families in the South despite average household budgets improving year-on-year according to the latest figures from the Asda Income Tracker.

Households across the North East, North West and Yorkshire and the Humber had an average of £202 a week left after essential spending in the three months to June 2026.

Households in London had the highest amount of discretionary income, with an average of £337 a week remaining, in contrast to families in the North East, who had £165 a week left after essential spending.

This marks £60 less than households in the East of England, South East, London and South West who had £262 a week remaining after bills and essential spending.

The overall inflation decreased to 2.6 per cent in June, which was down from 2.8 per cent in May, driven by less motor fuel inflation.

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Food and non-alcoholic beverage inflation slowed down to 1.7 per cent in the 12 months to June 2026, which was a decrease from 2.2 per cent in the last month.

Sam Miley, head of forecasting and thought leadership at Cebr, said: “Q2 2026 saw annual growth in the UK-wide Asda Income Tracker pick up to its highest rate in a year, with the pass-through of inflationary pressures from the war in Iran more muted than many anticipated.

“However, UK-wide progress hides significant regional disparities. Discretionary incomes in London are estimated to be over double those in the North East.

“Looking ahead, significant headwinds remain for the Income Tracker. A resumption of hostilities in the Middle East, as well as recalibrated energy bills, will add new inflationary pressures throughout the second half of the year.”

According to the research, the ongoing supply-side disruptions and commodity price fluctuations are likely to drive inflation higher as businesses pass through increased costs of production to consumers.