Asda income tracker reveals a £61 a month drop in disposable income for UK households in May, as earnings growth lags behind price inflation.
The £14 a week fall in family spending power compared with the same month last year is the largest decline on record since the Income Tracker began in January 2007. The average UK household had £165 a week of discretionary income last month, 8% lower than a year earlier.

Consumer price inflation remained at 4.5%, unchanged from the 32-month high recorded in April. This figure was double the current average earnings growth, which fell back to 2%.

The report finds that, while the UK economy continues to gradually recover, consumers remain under significant financial pressure, as growth in annual income fails to keep pace with the rising cost of living. Transport costs continue to be largest contributor to the headline rate of inflation, up 8% in May compare with the same month last year.

Asda president and ceo Andy Clarke said: "The true cost of living is now beginning to take its toll. Inflation is rising twice the rate of earnings, petrol prices are at a record high and utilities bills are only getting steeper - all adding up to a £14 a week hole in people's pockets. The combined effect is creating a perfect storm for customers trying to make ends meet."