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Average family is £700 a year worse off

The average family is exactly £728 worse off than it was a year ago, according to the latest Asda Income Tracker.

Rising inflation is putting the squeeze on our finances, and now most families have £60 a month less to play with.

Andy Clarke, Asda president 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.'

And the situation doesn't look like it's going to get better in a hurry. Roger Bootle, economist and former government adviser, said: 'The increase in the cost of energy means inflation is likely to reach a higher peak than previously forecast. I don’t think we will see a return to growth in disposable incomes until the end of 2012.'

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