The findings highlight just how much the increase in fuel prices, along with mortgage lenders and energy providers hiking their rates almost weekly, has impacted millions of British households which are left struggling to cope financially with their day-to-day bills.

In addition to the cutbacks on food, one in four Brits said they had reduced their spending on eating out or nights out in the cinema, and one in seven said they have had to cancel their holiday because they feel the pinch.

Half of the respondents said they used their cars significantly less, and one in ten stated they would even consider getting rid of their car. The cost of filling a tank has risen by 22 per cent over the last year.

And there are no signs of improvement; Roland Wessel, CEO of Star Energy, the second largest British onshore oil producers stated: “As long as people have to fill their cars up, as long as people have to generate power and electricity, I think the price will go up until we find an alternative.”

At the same time, the report Costing the Earth for accountancy company Ernst & Young warned that gas and electricity prices might rise by an extra 20 per cent to fund the cost of meeting the 2020 EU emission targets – to cut back on carbon dioxide level and increase renewable energies by 20 per cent.

In order to meet Europe’s “green goals”, the Government has drawn up a strategy to invest in wind, solar and other alternative energy sources which would cost £100 billion and requires British households to pay £213 more per year on their energy bills until 2020.

Prime Minister, Gordon Brown, said the plan would be “expensive, but worth it”, but it does not come as a surprise that most British householders seem to disagree. The report found that two thirds of respondents are not prepared to pay more for their energy to combat climate change or reduce their energy consumption.

“There seems to be a worrying degree of apathy among consumers towards reducing energy consumption, despite daily headlines about rising fuel bills,” Simon Harvey, director at Ernst & Young said.

The report warned that an additional increase might push more consumers into fuel poverty, as Mr Harvey explained: “Customers face a triple whammy – rising fuel and oil prices, the costs of climate-change mitigation, and the additional investment required to become more energy-efficient, for example by insulating the home.”

© Fair Investment Company Ltd