High cost of UK life

You don't get much to the pound in the UK

The UK is officially one of the most expensive countries in Europe.

People living in the UK pay more for a broad range of products and essentials, according to latest figures from the Office for National Statistics.

Although some prices have fallen on items such as clothing and fuel, others like alcohol and tobacco have risen, to make the UK the fourth most expensive country in Europe.

Consumers in only Denmark, Sweden and Finland have less purchasing power.

The figures also illustrate that the gap between the rich and poor is widening for the first time in a decade.

Child poverty

The report is a snapshot of the UK during the 1998/99 financial year and economic experts say the picture has changed again since then, giving the UK population a slightly better deal.

"Tony Blair is committed to the abolition of child poverty within 20 years and yet these figures show inequality was still rising during Labour's first two years," said Professor John Hills, at the Centre for the Analysis of Social Exclusion.

"However these figures are a bit out of date and won't take account of all the things Labour has done to take people out of poverty."

Borrowing has doubled since 1987

Such measures include the introduction of the minimum wage and national insurance and child benefit reforms.

The ONS's 31st annual social trends survey suggests Britain is experiencing economic patterns not seen since the boom and bust of the 1980s.

The report reflects an image where the rich are getting richer and the poor poorer.

It says that after stabilising in the 1980s, the distribution of income between the two groups appears to be widening again.

Consumer debt

The richest 10% of the population have seen their income increase at a rate more than twice that of the poorest 10%.

The survey also reveals that borrowing has almost doubled since 1987. Consumer debt now stands at nearly £115bn.

However, it is not all bad news.

Professor Hills said: "It's difficult to forecast the present, but I would expect that when we do get figures for now, we will find that living standards at the bottom will have been rising."