Average family £13 a week worse off, as spending power drops 7.1% and prices increase twice as fast as incomes.
The latest Asda income tracker revealed that the average UK household had £167 a week of discretionary income in April, down 7.1% on last year. The figure also represents a further decline from the relative stability of March 2011, when spending power stabilised to £10 a week.
Consumer price inflation rose sharply from 4% to 4.5% last month and the Bank of England has already warned that inflation could increase further still over coming months.
Shoppers remain under significant financial pressure, with earnings growth running well below the level of inflation and cost of living. Transport costs remained the largest contributor to the headline inflation figure, with the price of getting around now 9.6% higher than last year, thanks to rising petrol prices and train fares. In fact, AA data revealed that unleaded petrol prices were around 13% higher last month than in April 2010.
Asda president and ceo Andy Clarke said: "Spending power has seen another significant fall this month, which is adding further pressure on family budgets. We know that shoppers are being savvy and managing their finances...and buying what they need, when they need it."