The average amount of spending money available to UK families fell by £11 per week in February compared to the same month last year, new research shows.
Leading supermarket chain Asda’s monthly Income Tracker reveals that family spending power dropped last month for the 14th consecutive month, with available spending money declining 6.2 per cent year-on-year.
Rising prices in both commodities and shopping items, combined with a real-terms fall in wages has meant that families have found their budgets increasingly squeezed over the whole of 2010 and the beginning of this year.
Charles Davis, Managing Economist for co-authors of the report the Centre for Economic and Business Research, said: “The rising cost of essential goods such as petrol and foodstuffs continues to place pressure on households across the country - compounded by weak earnings growth and concerns about job security.
“The labour market recovery is still not yet convincing; public sector job losses this year-which appear to be occurring at a faster rate than the government initially expected –are likely to lead to a significant squeeze on the incomes of many households.”
Measures introduced in last week’s Budget, such as the cut in fuel duty and increase in personal tax allowance, show that the government is aware how much pressure people’s finances are under.
Last week it was reported that retail sales reduced by one per cent between January and February as the promotional season ended, whilst a record monthly increase in the Consumer Price Index put further pressure on retailers to raise prices.
Andy Clarke, Asda President and CEO, commented: “Asda mums tell us it’s never been tougher out there, and they need our help more than ever to help them juggle the competing pressures on their finances.
“That’s why we’re keeping things simple by focusing on lowering our costs, investing in lowering prices where it matters most, and backing up our words with a cast iron ten per cent Asda Price Guarantee to save them money on their weekly groceries.”