Consumers are having to cut back on spending as the cost of bills, fuel and food continues to rise along with personal debt.

A new report has said that, as prices continue to rise, consumers are going to have to reduce their outgoings in the second half of the year. The Alliance Trust conducted research that showed household spending rose slightly in the first half of the year, despite hikes in energy and food prices.

The survey also revealed that as mortgage repayments creep up and interest rates increase, debt is rising and consumers are being forced to cut back on their outgoings. Shona Dobbie, the head of the research centre at Alliance Trust, remarked: "Consumers are currently facing the worst financial reality ever in the 11 years of our study. Households now have to spend more on their mortgage repayments and council tax bills, combined with the fact that their real earnings are failing to keep up with inflation, and so they are feeling poorer and having to cut back in some areas of spending."