200 word daily macro: prepare for further real income drops

Often the most insightful economic surveys are not undertaken by the highest profile organisations.  One of my favourites is the Asda Income Tracker Survey.  Asda - owned by WalMart - are in a good position to give some insights, as well as benefit from the information on its customer base. 

The stand-out from the survey was this:

'The average UK household is now £868 a year worse off in real terms than they were in 2009. By 2018 this will be squeezed even further as the cost of living rises while the average household disposable income will remain at around £160 a week'.

To be precise, as shown in the graphic below, the rise will be £2/week over the 2013-2018 period. 

Economists and market watchers who wonder about the lacklustre economy in Europe now have their explanation.  Consumption - which makes up the majority of GDP in all European economies - remains under pressure.  £2 does not go very far...and that's assuming that the 'cost of living' increase is only c. 1.9% a year.

What is my guess on the reality?  Further real income drops. 

Not good.