Fuel duty rises by 2p a litre

The price of fuel has risen by 2p a litre, representing the third increase in the space of the last nine months.

Once VAT is added at 15%, the increase in duty equates to 2.3p a litre, and the cost will rise again when the standard rate of VAT reverts to 17.5% on 1 January 2010.

Business and motoring groups have widely condemned the move, with the director of the RAC Foundation, Stephen Glaister, warning that the rise will 'hit everybody hard'.

The Freight Transport Association also warned that high fuel prices are affecting its members, with fuel bills rising by £800m since December.

Meanwhile, the president of the AA criticised the timing of the rise, which comes as the UK economy is attempting to recover from a recession.

However, the Government has stated that the increase is needed to help boost public investment.