Living costs for Londoners jump

London families are desperately trying to cut back their spending as the impact of rising prices really starts to bite.

The Evening Standard's credit crunch panel have all reduced or stopped so-called 'discretionary' spending on treats such as new clothes and eating out. Each panel member has agreed to have their monthly spending monitored to help track changes to the cost of living.
Their latest reports come after the official inflation measure - the consumer price index - rose to 3.3% and Bank of England Governor Mervyn King warned that it could hit 4% this year.

Our panel found that despite making savings, their outgoings continue to go up as fuel, food and utility bills soar. They have also been hit by 'hidden horrors' on top of regular purchases, such as the cost of moving house.

Two households moved this month, one moved last month and the fourth is moving in two weeks. In two cases, the families are downsizing to cut costs.

The panel members all said grocery and fuel costs had increased the most. According to our survey, the average cost of a litre of unleaded petrol rose to £1.18 this month, up from £1.12 in May and £1.09 in April. A basket of 10 everyday goods bought in London increased by 0.45% between mid-April and mid-June, while food bills across the capital have risen by 6% in the past year - almost twice the official rate of inflation.


Family with two children

Emmanuel Bourdon, 28, wife Davinia, 28, and sons Olivier, two, and Sebastien, 11 months

Occupations: Emmanuel is a wine specialist and Davinia is a full-time mother.
Home: a rented two-bedroom flat in Hampton, west London.
Outgoing costs: Rent £900; council tax £125; electricity £40; gas £40; water £35; TV licence £11; petrol £85; travel £90; road tax £17; car insurance £21; groceries £648; eating out £250; going out (including children's playgroups) £208; clothes £60; credit cards £30; phone/internet £158; unexpected expenses (BT bill to re-connect line, fee for moving out, professional cleaner for previous house) £580.