Average UK family £6 a week worse off in February 2010 than they were a year ago.
Asda's latest Income Tracker has revealed a 3.8% year-on-year decrease in discretionary income of the average UK household. The continued weak growth in earnings has resulted in the second month of decline in spending power, with UK families £6 worse off in February this year, compared with the same period in 2009.

Discretionary income fell by 4.7% in January 2010 and by 3.8% in February, resulting in the average UK household having just £149 a week.

According to the Income Tracker, so far in 2010, weaker earnings growth has had the most significant impact on family spending power, which has not been helped by relatively strong price rises for goods and services due to the VAT reversal.

Charles Davis, the economist at Cebr who compiles the report for Asda said: "Despite a large reduction in claimant count unemployment in February, earnings growth remains exceptionally weak and inflation is still high. The one positive factor is that a large part of the high inflation rate is explained by the VAT reversal. Hence, the Bank of England can be slightly less concerned abut wider inflationary pressures. But the bottom line is that households' real spending power has fallen; the economic environment is still tough."