Consumers suffered a £14 a week fall in family spending power in May compared to the previous year – the largest decline on record.

According to the Asda Income Tracker, the average family had £165 per week to spend in May, 8% down from this time last year.

Consumer price inflation remained at 4.5% in May putting disposable income under pressure.

The report shows that while the UK economy continues to gradually recover, consumers remain under significant financial pressure as growth in income fails to keep pace with the rising cost of living.

Asda chief executive Andy Clarke said: “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 - all adding up to a £14 a week hole in people’s pockets.

“The combined effect is creating a perfect storm for customers trying to make ends meet.”

Cebr managing economist Charles Davis said: “Pressure continued to mount on household finances in May, as the rapidly increasing price of transport and food pushed the cost of living even higher, and the price of alcohol and tobacco rose at the fastest rate since 1992.

“The Asda Income Tracker shows discretionary income is under further pressure as annual earnings growth remains historically weak – under half the rate of inflation. The current picture of low wage increases and rapid inflation is likely to persist for the rest of the year, pointing to an extended squeeze on real disposable income.”