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Families 'have £8 less each week'
Spending on essentials like food has become more expensive
Average families have seen their disposable incomes drop by £8 a week in the past year, research suggests.
The Centre for Economics and Business Research said families had seen their earnings rise by £23 a week, or 3.6%.
But that was outstripped by taxes, which rose 6.5%, and higher bills for essential items such as food and fuel.
This week government figures showed that higher fuel and food bills had driven annual inflation to its highest level for 11 years.
The government's preferred measure of inflation, the consumer price index, rose to 3.3% in May, the highest level since the measure was launched in 1997.
However the retail prices index, still widely followed by wage bargainers, rose to 4.3% and has been above the growth rate for average earnings since the start of 2007.
Stagnation
In his annual Mansion House speech this week, the governor of the Bank of England, Mervyn King, warned that real incomes would stagnate this coming year.
The Centre for Economics and Business Research (CEBR), which was commissioned by Asda to carry out its research, said the average family had an income of £633 a week, which was 3.6% higher than May 2007.
However, it found taxes and national insurance had risen by 6.5% over that time.
Adding in the effect of more expensive essential spending - such as transport fares, utility bills, food, clothes and housing - meant that these families now had, typically, just £131 left to spend on other things - a drop of 6%.
"The prices of important essentials such as food, gas, electricity and transport have all risen considerably over the last year - with inflation for all these categories in excess of 6%," the CEBR said.
Spending on essentials like food has become more expensiveAverage families have seen their disposable incomes drop by £8 a week in the past year, research suggests.
The Centre for Economics and Business Research said families had seen their earnings rise by £23 a week, or 3.6%.
But that was outstripped by taxes, which rose 6.5%, and higher bills for essential items such as food and fuel.
This week government figures showed that higher fuel and food bills had driven annual inflation to its highest level for 11 years.
The government's preferred measure of inflation, the consumer price index, rose to 3.3% in May, the highest level since the measure was launched in 1997.
However the retail prices index, still widely followed by wage bargainers, rose to 4.3% and has been above the growth rate for average earnings since the start of 2007.
Stagnation
In his annual Mansion House speech this week, the governor of the Bank of England, Mervyn King, warned that real incomes would stagnate this coming year.
The Centre for Economics and Business Research (CEBR), which was commissioned by Asda to carry out its research, said the average family had an income of £633 a week, which was 3.6% higher than May 2007.
However, it found taxes and national insurance had risen by 6.5% over that time.
Adding in the effect of more expensive essential spending - such as transport fares, utility bills, food, clothes and housing - meant that these families now had, typically, just £131 left to spend on other things - a drop of 6%.
"The prices of important essentials such as food, gas, electricity and transport have all risen considerably over the last year - with inflation for all these categories in excess of 6%," the CEBR said.
