Quote: The average family will be £910 worse off this year as they face the biggest peace-time squeeze on their finances since 1921, according to a report.
Rising household bills mean spending power will be significantly less than two years ago, the Centre for Economic and Business Research said.
The consultancy estimates that disposable incomes will fall 2% in 2011, following a 0.8% drop in 2010.
Only the two world wars had bigger impacts on spending, the CEBR said.
The organisation forecasts that inflation will average 3.9% in 2011 - its highest since 1992 - as January's hike in VAT to 20% from 17.5% and the rising cost of oil and other commodities continue to drive up prices.
Pay packets, on the other hand, will rise just 1.9% as unemployment remains high and the full extent of public sector cuts kick in. | 
