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A new report reveals that rising food and utility bills mean the average family is £8 per week worse off this year compared with last year's figures.

The Centre for Economics and Business Research's report, which was commissioned by Asda, stated that while families had been earning more, increases in expenses had outstripped the higher earnings.

According to the figures in the report, the average family earns a weekly income of £633 which has risen by 3.6 per cent since May 2007.

But a 6.5 per cent rise in levels of tax paid and national insurance contributions means that the average take home salary is lower.

A family's disposable income, the amount available to spend, has also been hurt by higher costs of essential goods such as food, clothes, housing, utility bills and transport expenses. Thus after removing essential expenses, an income of £131 is left, which is 6 per cent less than last year.

A spokesman for the Treasury said the findings of the report presented an inaccurate picture.

He said: "In fact people have seen their tax bill fall in the past year as a result of a cut in the basic rate of tax to its lowest level in 75 years.

"As a result of tax and benefit measures introduced by the government, this year all households will be on average £1,500 a year better off in real terms, and families with children will be on average £1,800 a year better off in real terms, compared to 1997," he added.