Government reports suggests that high oil and food prices will be around for years to come. The Treasury have warned that the rapid growth in the world economy and population, coupled with supply shortages, will stop current prices falling back in line with previous levels.

This will not make pleasant reading for families that are already feeling the pinch of the credit crunch, which has already lead to a rise in borrowing costs, utility costs and shopping bills.

The Treasury report says: “Expert views and market expectations reviewed here suggest that prices are likely to remain higher than their historical averages” and that “it will be an ongoing challenge for supply to match demand at affordable prices.”

UK wholesale gas prices have risen by 250% in the past 12 months and the average weekly shop has increased by 6%, leading to shoppers feeling the pinch during the credit crunch.