The huge and unprecedented squeeze on family budgets since the start of the credit crunch is revealed today.
British families are spending more than £60 a week less in real terms than they did in 2006, the last boom year, according to data from government statisticians.
Household spending peaked at a weekly average of £541.20 in 2006 and has fallen steadily ever since, after allowing for inflation, to £483.60 last year.
It is the longest fall in family spending since the Great Depression and helps to explain why the economy — and the high street in particular — has struggled to recover from recession.
The figures, in the annual Family Spending survey from the Office for National Statistics, show falls in every category of weekly spending, apart from “heating, fuel and power”.
This rose in real terms from £58.30 in 2005/2006 to £63.30 last year.
The headline figure, not allowing for inflation, puts family spending at an-all time high of £483.60 a week last year compared with £473.60 a week in 2010.
However, families’ buying power has been eroded by a rise in the cost of living.
The rate of inflation has been far above the Government’s target of two per cent for much of the past four years and hit five per cent last year.
The latest retail figures show high street sales limped forward 0.4 per cent in November compared with last year.
Stephen Robertson, director general of the British Retail Consortium, said the figures suggested that customers “are taking care not to spend too much too soon”.
