By Daniel Hunter

A study by the Office for National Statistics (ONS) has shown that disposable incomes dropped to their lowest levels in nine years in the first quarter of this year.

UK families continue to be squeezed by high prices and sluggish wage growth as the recession continues to take its toll.

The study revealed that, taking inflation into account, there has been a 1% drop in take home incomes as the average dropped to £273 a week, the lowest level since 2003.

Real incomes per head also dropped by 0.6% in the first three months of this year compared with the fourth quarter of 2011 to £4,444 across the quarter, the lowest figure since the summer of 2005, said the economic position of households study.

The price of inflation has pushed up the cost of regular outgoings as the ONS said that the decrease in personal budgets was "primarily due to prices going up at an increasing rate over most of the period (last quarter)".

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