Consumers' spending power fell by £8 a week last month and the trend is set to worsen with inflation heading towards 5pc.
The first Asda Income Tracker of 2011 has revealed that in December 2010 family spending power fell by £8 per week, the largest fall on record.
The decline in family spending power in December 2010 is the largest annual fall since the Asda Income Tracker began in March 2008 and spending power fell in annual terms during every month of 2010.
The average household had £172 a week of discretionary income in December 2010, 4pc lower than a year earlier. The £8 a week fall compared to the same month a year earlier is the largest decline on record.
For 2010 as a whole, average household discretionary income was down 2.2 per cent from 2009 levels.