Grocery prices fall but energy bills mean families struggle

London families face monthly energy bills of almost £100 after a series of record price rises.

The Evening Standard's credit crunch panellists reveal how inflation-busting fuel increases are hitting households across the city.

The rise in energy bills means our panel are struggling despite supermarket price cuts which have resulted in a five per cent fall in our shopping basket.

Families are buying "just the basics" after British Gas raised prices by 35 per cent and amid warnings that other suppliers are about to follow suit.

One of our panellists will see energy bills rise to £98 next month as well as being hit by rising nursery fees as she prepares to return to work.

New mother Davinia Bourdon is concerned that she faces paying "a big lump sum" in energy payments when she comes off a direct debit.

She said the family had switched supermarkets to save money and cut down on eating out. "We're also taking advantage of any cheap offers for playgroups where we can."

Panellists are using credit cards, stretching overdrafts and increasing their working hours to pay for unexpected costs.

Panellist Charlotte Hopkins said the buffer to pay for these "hidden horrors" was tighter than last year.