last updated: Wednesday 2 April 2008, 10:59am

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Rising cost of living hits family budgets

Families are about £7 a week worse off than they were a year ago rising food, fuel and transport costs continue to eat into their incomes.

Figures show households earned around £17 a week more before tax during February than 12 months earlier, but this increase was more than offset by a £24 jump in the weekly cost of essentials.

As a result people had an average of just £133 a week left to spend on leisure and entertainment after meeting their essential outgoings.

The fall in disposable income was driven by a 6.2 per cent jump in transport costs during the past year, with petrol soaring by 20.3 per cent.

Families' incomes were further squeezed by a 5.6 per cent year-on-year rise in the price of food and non-alcoholic drinks and a 3.5 per cent rise in energy bills, with five of the UK's six major gas and electricity providers hiking their prices during the month.

Overall, the average household had an income, including money from investments and benefits, of £655 a week, on which they paid around £130 in tax and spent £392 on essential living costs such as food and fuel, leaving them only £133 of disposable income.

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