Working for less

The average family is £9 a week worse off than a year ago as steep rises in the cost of living wipe out pay increases, according to Sky News .

Despite average earnings rising by £22 a week during the past 12 months, the typical family had 6.5% less disposable income in June after meeting all their essential outgoings than they had a year earlier.Households had a monthly income of around £538 per week after paying tax during the month, 3.2% more than they had coming in during June last year.But the rise in pay was more than wiped out by a 6.8% jump in the cost of essential goods, such as food, clothes, utility bills, housing and transport, with households spending around £407 on these items a week.

As a result, people had just £131 of disposable income left after meeting all their bills, £9 less than in June 2007.

The research found that the rise in spending on essentials was driven by a 9.5% jump in food prices, while transport costs have soared by 7.3% during the past year.The typical family now also spends around 7% more on utility bills than they did in June last year.