Worse to come

While MPs vote to retain their 2nd home additional expenses allowance of 24,000 pounds , it was revealed that the spiralling cost of living has left Britons 15 per cent worse off than they were five years ago, according to research published. Households were now left with an average of £772.79 to spend each month after paying their fixed monthly outgoings – down from £909.84 in 2003. The report found fixed monthly household costs had soared by nearly 45 per cent during the past five years, to take up 53 per cent of people's total pay. Homeowners were shelling out 78 per cent more in mortgage repayments than in 2003-4 at an average of £735 a month, due to a combination of higher interest rates and people taking out bigger mortgages.Monthly energy bills have leapt by 110 per cent during the period to an average of £95.80, while petrol costs for the typical family are 29 per cent higher at £193.61.

"Many UK consumer segments are feeling the pinch as big rises in household costs outstrip relatively modest wage inflation.Consumers are painfully aware of hikes in petrol and utility bills, but we've also seen some hefty price increases in pension contributions and debt repayments. If we factor in food price inflation, which official figures have placed at 8.7 per cent in the past year, it's clear household budgets are under enormous strain. Add the impact of falling house prices and the consumer economy is undoubtedly on a knife edge."

Worst could still be to come, with utility prices expected to rise by up to 40 per cent this year.