The average British household is nearly £2500 worse off than last year after soaring energy and food costs brought the first drop in disposable incomes for 10 years.

The average British household is nearly £2500 worse off than last year after soaring energy and food costs brought the first drop in disposable incomes for 10 years.

Research yesterday revealed that the amount of cash people have in hand - after paying their bills for essentials such as housing, utilities, insurance and groceries - dropped fully 15% in just a year.

A combination of rising prices and taxes and modest salary increases over the past 12 months have effectively wiped out a decade of progress in real disposable incomes since Labour came to power in 1997, according to a study carried out for uSwitch.com, the price comparison service.

"Consumers are in a lose-lose situation where everything is shooting up apart from their incomes," said uSwitch.com's Ann Robinson. "It's a Catch 22 situation. Struggling consumers need pay rises to help them to meet growing cost of living, but the Bank of England and the government wants to keep pay rises to a minimum to dampen inflation." The new figures emerged as the deputy governor of the Bank of England, Charles Bean, warned that the current global economic slowdown would likely "drag on for some considerable time".

Mr Bean, speaking after the UK economy failed to record any growth in the second quarter, did predict recovery next year. But he drew worrying comparisons with the oil crisis of the 1970s, saying: "It's fair to say that if you look at the shocks impinging on us, this is at least as challenging a time as back in the 1970s."

Oil - and other energy - costs have eaten deeply into disposable incomes, the uSwitch.com study found. The average annual car fuel bill has leapt 27.9% from £1295 to £1655. Gas and electricity bills are up, too, by 28.3% and 20%. Overall, uSwitch.com calculated "real" inflation - rises in the prices of goods and services people used most - at 8%. Disposable income enjoyed by households, however, still varies dramatically from region to region. It averages at nearly £42,000 in the better-off boroughs of London but under £5000 in Newcastle.

Householders in Glasgow and Orkney are among the most cash-strapped in the UK, with respectively just under £10,000 and just over £11,000 left a year after bills.