The average UK household had £8 less a week in disposable income in April compared to the same period a year ago, according to Asda’s Income Tracker.

The average UK household had £177 a week of discretionary income in April, 4.2% lower than a year earlier.  Food costs also rose by 2.8 per cent in April year on year.

The research also showed there was an 11% rise in transport costs year on year. As a result, Asda has today reduced petrol prices, adding to the cut it made last week, meaning unleaded and diesel are now 113.9p and 116.9p respectively.

The move follows Morrisons’ announcement today that it will reduce the price of its unleaded and diesel by 2p each over the bank holiday weekend.

Andy Clarke, Asda chief executive said: “This month’s tracker shows £8 a week drop in disposable income, reiterating that life is still tough for consumers and this is unlikely to change. 

“To ease the pressure we have led again on cutting the price of petrol at the pump, and two consecutive weekly drops in price will be a welcome relief to customers.”

Charles Davis, the economist at Cebr who compiles the Income Tracker report for Asda, said: The labour market continues to provide mixed signals; earnings growth has picked up in early 2010 as bonus payments across the economy rose, but unemployment is above the 2.5 million mark for the first time since 1994 and with a sluggish recovery, significant spare capacity and public sector cut backs all expected, earnings growth is likely to fall back over the coming months.

“At the same time, the cost of living has continued to rise, with sterling depreciation and commodity price rises playing a key role. The rise in inflation above target caused a small annual decline in the Asda Income Tracker for the third time in five months.”