Asda’s latest Income Tracker has found spending power has slowed for a third month, as the lowest-income families face a £76 weekly shortfall to cover essential costs.

The supermarket stressed that families are seeing much of their income growth swallowed up by the cost of essentials.

Although household incomes rose by 3.8 per cent over the past year, rising housing, energy and transport costs meant that spending power in real terms increased by just 2.4 per cent – the weakest level since March.

Rachel Eyre, chief customer and digital officer at Asda, said:”Every pound saved on the weekly shop matters when budgets are stretched. With household bills continuing to put pressure on family finances and customers already planning ahead for Christmas, we’re focused on helping them make their money go further.

“That’s why we’ve cut the price of 1,000 products and are holding those prices until after Christmas, helping customers get great value every time they shop with us.”

Subscribe to Grocery Gazette for free

Sign up here to get the latest grocery and food news each morning

More than 90 per cent of income for households in the second-lowest income group is now spent on essentials, leaving just £11 a week for discretionary spending.

Even middle-income families, usually best placed to absorb rising costs, are only 58p a week better off than a year ago.

Sam Miley, head of forecasting and thought leadership at Cebr, added: “Pressure on household finances looks set to persist. A higher energy price cap and dearer fuel will keep essential costs rising at an elevated rate, while cautious hiring by employers limits any offsetting boost to incomes.

“Rising core inflation also suggests that higher energy costs are increasingly feeding through to prices across the wider economy.”