Families have extra £10 a week

The sharp fall in interest rates means families now have an extra £10 a week more than they did a year ago.

According to research commissioned by Asda, the average household had £162 a week of disposable income after paying all of their bills during October, 6.5 per cent or £10 a week more than in the same month of 2008.

The extra money in people's pockets is down to mortgage repayments for homeowners with variable rate mortgages now being considerably lower than they were, says the report.

The Bank of England base rate was at 4.5 per cent in October 2008, says report makers the Centre for Economics and Business Research (CEBR).

But it warned that people's discretionary income had actually been flat for the past three months, and it is predicting a fall in the amount people have left over to spend in the months ahead.

Transport costs have increased 3.5 per cent year-on-year, while the price of food and non-alcoholic drinks is 2.2 per cent higher.

Charles Davis, an economist at CEBR which compiles the report for Asda, said: "In October, the Asda income tracker shows a smaller year-on-year gain in discretionary income than September. Households are better off compared to a year ago, thanks to falling mortgage payments and utility bills.

"However, the price of some essentials, notably transport and food, are rising relative to last year."

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