We've never had it so bad: Families' financial squeeze is worst in 90 years - 10th Apr 2011

Soaring inflation and weak earnings growth has led to the biggest squeeze on household finances since 1921, research has revealed.

British families are on average £910 worse off than they were two years ago, the Centre for Economics and Business Research found.

The squeeze - which is considered the worst in peacetime for 90 years - is set to continue with a two per cent fall in household disposable income this year.

The squeeze is set to have a knock-on effect on the already-suffering high street as shoppers rein in their spending.

The CEBR said public spending cuts was a 'minor element' in the troubling financial conditions, with the rising cost of oil, food, cotton and metals being bigger contributory factors, the Sunday Times reported.

The fall in disposable income is comparable with the savage post-World War One recession which lasted between 1919 and 1921, as a result of a collapse in manufacturing and international trade.

The findings also show the fall in household disposable income is sharper than in the 1930s depression. Read More