Soaring bills tighten squeeze on families

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Families find themselves with less spare cash at the end of the month as household bills continue to go up relentlessly. Incomes are rising below the rate of inflation, which means they are falling in real terms, and are now 1% lower than a year ago. Real incomes have been falling over the past 16 months.

At the same time, families are having to fork out more for the bare essentials - in particular utility bills. Spending on essentials was up 3.5% in September from a year ago, with spending on gas and electricity 4.7% higher, according to Lloyds TSB. Petrol and water bills have also surged.