Asda has offered a nugget of hope for UK families, reporting a sharp drop in food inflation that may help counter a £10 a week disposable income fall in the last year.
New research from the supermarket has revealed that disposable income for UK families has fallen by £10 a week since October last year.
However, food price inflation fell back to 10.1 per cent over the year to October, down from 11.3 per cent in September. The average UK price of essentials like bread and cereals, meat and vegetables all fell, according to the report.
The Asda income tracker, which was published ahead of yesterday's Government Pre-Budget Report, showed that the average UK household had £133 a week disposable income in October 2008 - £10 a week less than a year earlier and a drop of 7.3 per cent.
Douglas McWilliams, chief executive of the centre for economics and business research, which produced the report for Asda, said: "The Asda income tracker shows that the sharpest fall in inflation for 16 years is starting to improve spending power for the average family.
"In the coming months, we are likely to see rising unemployment and reduced growth in wages. However, the continuing fall in inflation may help cushion the impact of the recession."
Asda describes its income tracker as a barometer for the economic welfare of 'middle Britain', taking into account income, tax and all basic expenditure items.
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