Consumers ‘£14 a week worse off’

The chain’s latest Income Tracker found the average UK household had £165 a week left to spend in May, a fall of 8 per cent on the same month in 2010 after inflation remained at twice the Government’s target at 4.5 per cent.

The £14 a week reduction equates to a £61-a-month drop and is the biggest decline since the survey began in January 2007.

Andy Clarke, Asda chief executive, said the impact of increased living costs, record fuel prices and soaring utility bills was “creating the perfect storm for customers trying to make ends meet”.

At the same time, incomes have failed to keep up with the rising cost of living, with earnings growth of 2 per cent in the three months to April comparing with an average increase of 4 per cent between 2001 and 2008.

The cost of getting around increased by 8 per cent on a year ago, the report found, with petrol prices up 12.7 per cent in May, according to the AA.

Meanwhile, alcohol and tobacco prices have risen by nearly 10 per cent over the last 12 months, the fastest year-on-year increase since March 1992, the report said.