An average household had£131 a week disposable income last month – 6.5 per cent less than a year earlier.
The situation has been exacerbated by the rise in food prices, which have had a big impact on consumers’ shopping habits. Asda’s income tracker found that the cost of the average family’s essential basket of goods had risen to£407 a week, a 6.8 per cent rise on the previous year.
Transport costs are also leaving their mark, up 7.3 per cent in the year to June 2008 and diesel pump prices soared 35.1 per cent over the year.
Asda chief executive Andy Bond said: “We’re beginning to detect purse strings tightening more towards the end of each month as people wait for their next pay packet.”