British shoppers pay 16% more

Britain has been labelled the rip-off capital of Europe with shoppers paying at least 16per cent more for clothes, food, drink and CDs than elsewhere.

Research by City bank Dresdner Kleinwort Wasserstein reveals that a video of the film Gladiator costs less than £9 in Italy but more than £15 in Britain, a bottle of Smirnoff vodka costs £4 in Spain but £11 here, and typical CDs are more than double the prices charged in Holland.

Last year the Evening Standard ran a series of articles highlighting price differences for goods such as beer, restaurant meals and concert tickets.

The EC has long argued that Britons pay over the odds for cars with many people going abroad for better deals, but in the past two years car firms have offered substantial-discounts to win back custom. The report cites few examples of where Britons actually pay less - Heinz tomato ketchup and paperback books are among Britain's best buys - but Spain is the cheapest country in Europe for most goods.

On 1 January the euro notes will start to replace national currencies in 12 countries.

The bank warns that British retailers may exploit the changeover to keep prices high. With most countries operating under the single currency prices will be easier to compare, but with Britain remaining outside the so-called euro zone, it will be easier for retailers to escape making cuts. Consumer groups say British shoppers will simply shop abroad. Principal policy adviser at the Consumers' Association, Phil Evans, said: "In certain sectors, cars for example and expensive electrical goods, some manufacturers may try to raise prices but that is likely to backfire - consumers will simply stay at home. Some will even go abroad to shop."

A spokesman for the British Retail Consortium, which represents 90 per cent of the country's retailers, said: "It's a fallacy to suggest that people are not sophisticated enough to work out that prices are for various things in different currencies. We all do price conversions on holiday."

Meanwhile, the economy is being boosted by Londoners too lazy or too busy to cook. New figures reveal that money spent on takeaways and restaurant meals puts the sector among the top 10 fastest growing in the country.

The total amount spent on eating out in 1999 was £29 billion - more than five per cent of our total spending, according to the Office of National Statistics. About 660 million meals were served across the country - up 50 per cent over the past seven years, Foodservice Intelligence figures revealed.

Miles Quest of the British Hospitality Association said: "London is Britain's eating capital as well as its political capital."