Asda Income Tracker reveals UK households were £11 a week worse off last month, as cost of transport and essential goods continue to rise.
According to the report, the average UK family had £169 a week of discretionary income in February - down 6.2% on last year. It is also the largest fall since the Income Tracker began in 2007 and represents the 14th month of consecutive decline.

The continued decline in family spending power was the result of the price of essential goods and services rising faster than net income growth, explained the report, which is produced by the Centre for Economics and Business Research (Cebr).

While gross incomes grew by 2.2% in January 2011, year-on-year, the figure was down from the 2.4% seen in January last year. Meanwhile, inflation on the consumer price index was 4.4% in February - a notable increase on the 4% growth recorded in January and the highest rate of inflation since October 2008.

Rising global commodity prices have continued to soar in recent months, meaning transport costs continued to be the largest contributor to the headline rate of inflation. Asda expects these factors to continue over the short term.

Cebr managing economist Charles Davis commented: "The rising cost of essential goods such as petrol and food stuffs continues to place pressure on households across the country - compounded by weak earnings and concerns about job security."