It was the first time since March 2010 that discretionary spending rose for two months running, The Daily Telegraph reported Tuesday.
Compared to July 2011, the average household in Britain now has an under-whelming extra $1.50 to spend each week, said CEBR, a think tank hired by supermarket chain Asda.
"This second month of increases on the Income Tracker is welcome news for U.K. families, as the average household now has the highest amount of discretionary income in 16 months," said Charles Davis, head of macroeconomics at CEBR.
"However it may not all be plain sailing ahead as pressures remain. There is still much underlying weakness in the labor market and unemployment is likely to stay persistently high."
2014: The Year in Fashion [PHOTOS]
GM recalls 221,000 Cadillacs and Impalas