The cost of living for families in the UK has fallen but their budgets will be placed under increased pressure in 2009 thanks to growing unemployment, supermarket Asda said today.
Households were £4 a week worse off in December 2008 than they were a year earlier, Asda said on its income tracker, yet this fall has shrunk in the last three months.
Weekly family earnings after tax in December rose £20, it added, but spending on essentials jumped £24 compared with 2007.
Chief executive and president Andy Bond said: “We cannot underestimate the impact this downturn is having on UK families and how important it is that action is taken to restore confidence in the banking sector and wider economy.”
Economist at the Centre for Economics and Business Research and report author Charles Davis added: “The improvement in living standards was partially offset by weaker earnings growth as the labour market deteriorated significantly in the final quarter of 2008.”
Asda argued that the VAT cut slightly helped peoples’ standard of living but the recession will hit the slight benefits of this.
This month, 24 staple food items are cheaper at Asda than at Sainsbury’s and Tesco, according to mySupermarket.co.uk.
