the perfect storm

Households were £14 a week worse off in May following a record squeeze on family spending power in the month, supermarket Asda said today. The £14 a week reduction equates to a £61-a-month drop and is the biggest decline since the survey began in January 2007.

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. Incomes have failed to keep up with the rising cost of living, with earnings growth of 2% in the three months to April.

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... The true cost of living is now beginning to take its toll. Inflation is rising twice the rate of earnings, petrol prices are at a record high and utilities bills are only getting steeper..."

The average family is £728 worse off than a year ago as wages fail to keep pace with the rising cost of living, the figures show.