UK families are experiencing the biggest test on their family budgets since the 1920s, according to the supermarket giants, Asda. They have reported the largest drop in monthly disposable income in their monthly Income Tracker since they began keeping their records.
The disposable cash available to the average family dropped £14 in August, leaving them with £162 a week, a fall of 7.9% from the same time last year. 
The retailers also conducted another survey which revealed that customers were being squeezed by rising costs from all angles. However, two out of five questioned said that a halt in fuel bills would most aid them in the current financial situation.
With inflation rising to 4.5% in August and most of the major energy providers increasing their costs most families are facing pressure on their household budgets.
Asda predict that the pressure is likely to continue as the labour market takes a turn for the worse when public sector cuts come into effect.
In addition to energy prices increasing, transport costs are continuing to rise. Figures released from the AA show that the price of unleaded petrol rose by 16.5% in the past year and diesel prices went up by 17.4%.
Asda’s monthly disposable income tracker is calculated as the amount of money left over once a family has paid their taxes, basic monthly costs such as mortgages, utility bills, food & drink and transport costs. The tracker provides an indicator of monthly spending power for the average British household.
Asda’s chief executive, Andy Clarke, said: “It’s clear from this record drop in disposable income that British families have never had it so tough. Our customers are feeling the pinch – they’re clear they want more help to help make ends meet.”
Managing Economist for the Centre for Economics and Business Research (CEBR), said: “Rising unemployment has added further pressure to household finances in recent months, compounding the squeeze on spending power caused by high inflation and weak earnings growth.
“The Asda Income Tracker shows that family spending power has fallen sharply compared with a year ago. With the UK economy in a particularly precarious state at the moment, things could get worse before they get better. However, inflation should fall back in 2012 and the Bank of England is unlikely to raise interest rates anytime soon given the weakness in the UK economy.”
Related Posts :
