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Household spending at a 20-year high

Basic living costs burden UK households.

Household spending on basic goods and costs such as mortgages are at their highest in 20 years, according to economists from Oriel Securities.

Over the last ten years, the cost of living has risen by over 10 per cent, with households spending up to 67.3 per cent of their income on basic items such as food, petrol and mortgages. Oriel's analysis estimate that the average UK household requires £2,091 to cover its monthly costs and is only able to save £162 over the period.

The burden on UK households comes despite a 0.5 per cent drop in interest rates, which soared by 22 per cent in 2008. According to Oriel, households have been swamped in debt, which has in turn limited economic growth.

The report also specifies that consumer spending, which has fallen by 1.7 per cent this year, has affected the Britain's economy.