"Household income sees biggest fall since 1977"

UK households have seen the biggest fall in disposable income for more than 30 years, official figures have shown.



The Office for National Statistics said that in the year to the end of March real incomes - adjusted for inflation - fell 2.7%, a fall not seen since 1977.

Higher taxes, domestic bills and inflation are all eating away at consumers' spending power.

Bank of England governor Sir Mervyn King told MPs there was a "substantial squeeze on real living standards".

According to the latest ONS data for the first three months of 2011 household spending fell 0.6%, its fastest quarterly decline since the second quarter of 2009.

This took the annual fall in household income to 2.7%, a squeeze on spending that was underlined on Tuesday by further gloom on the High Street.