UK-Inflation
British families have less money to spend on themselves than at any time for 17 years due to the rapid rise in the basic cost of living, according to research by Capital Economics consultancy.

Household income was found to have been eaten up by unavoidable outgoings such as housing, food, heat and council tax that has soured over the past six years.

Capital Economics said that the amounts left over for
"discretionary spending" were now at their lowest since 1991 and warned of worse to come in the current economic climate.

It forecast that food prices to go on rising at their current rate of 6 per cent a year for months to come, while gas and electricity prices will jump by up to 10 per cent in the second half of this year.

Last month, research carried out by MySupermarket.co.uk found that higher food costs have added 15 per cent to the average weekly Pnds 100 (Dlrs 200) shopping for a family of four in the UK.

The new findings echo those of the Daily Mail's Cost of Living Index, which has shown families need to find more than Pnds 100 a month extra this year just to stand still. A further Pnds 2,000 a year is needed once higher mortgage costs are added.

The soaring costs appear to contradict the government's Consumer Price Index, showing inflation is running at only 2.5 per cent per year.

Political analysts have suggested that the economic woes, which are being blamed on the global credit squeeze and effects of higher oil prices, contributed to last week's backlash against Prime Minister Gordon Brown's Labour Party at local council elections.