The cost of living has risen by 4.9%, a report from supermarket giant Asda reveals.
This means the average UK household had 3.2% less disposable income in January 2008 compared with the same period last year.
The findings come from an income tracker report launched by Asda last week, which takes into account income, tax and basic costs like food and shelter to measure the average household’s disposable income. The report reveals that despite earnings before tax increasing by £22 a week in 2007, the average family was £5 a week worse off.
The supermarket firm attributes this to increases in tax and essentials such as food and housing, which now cost £27 a week more. Transport costs have also risen by 6.4%, including a 19% rise in the price of petrol.
Andy Bond, chief executive officer of Asda, says: “Our 15 million customers expect us to make the cost of living more affordable for them. I believe this gives us the right to talk about the issues that affect how much money consumers have to spend.
“The latest figures indicate that 2008 is going to be a tough year for customers and confirms what we’ve suspected, which is that household budgets are being stretched to the limit.”
He adds: “A combination of factors are pushing up the cost of living for millions, making it more vital than ever for retailers like us to keep prices as low as possible.”