A new report suggests thousands more people are living in absolute poverty than recorded by official figures.

Research by the respected Institute for Fiscal Studies argues that Government statistics fail to take into account the fact that the rising cost of living hits poorer families harder than those on higher incomes.

It found households with the lowest incomes have seen prices rise by 50 per cent in the last decade compared to 43 per cent for the wealthiest.

That translates into an extra 300,000 people in absolute poverty, the IFS says in research published by the York-based Joseph Rowntree Foundation (JRF).