Utility costs have soared by 8.2% in the year to July, which is the strongest annual rise since August 2012, new research has shown.
Asda’s income tracker report found that UK households were £1 a week worse off than they were a year ago. The average family now has £160-worth of discretionary income every week.
Furthermore, this is also £5 a week less to spend than in January 2010 – a recent peak – as wages have failed to rise significantly.
Petrol prices also rose
In a further strain on household budgets, July also saw an increase in petrol and diesel prices, with vehicle fuel rising over the year by 2.4%. This is a rise of 1% from the previous month, according to the research, which was compiled by the Centre for Economics and Business Research.
The report did find, however, that some of the pressure was taken off living costs thanks to an easing back on the cost of mortgage interest payments due to heightened competition between providers.
Moreover, clothing prices also fell thanks to summer sales, as well as recreation and culture costs, further easing the strain on Brits’ budgets.
Andy Clarke, Asda president and chief executive officer, commented that families are beginning to feel “less gloomy” about their finances, despite the rising energy costs and the fact that their overall disposable income is likely to have dropped.
Rising cost of living ‘pulling at purse strings’
He commented: “A ‘feel-good’ summer has contributed to a boost in retail sales, but we can’t ignore the fact that the squeeze on income growth and the rising cost of living continue to pull at consumer purse strings.”
This comes amid reports that high energy bills have seen energy usage drop as households try to save money.
Average energy consumption in England and Wales dropped 24.7% between 2005 and 2011, according to the Office for National Statistics.