Check the output of the Lambda sensor, chances are that's the problem especially if it's over 10 years/100k miles old.
Having the engine management light (Lambda) on at MoT is a fail regardless these days.
As for the economy you got, doesn't surprise me at all.
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Cheers
Dave
Next Door to Top-Gun with a Honda CR-V & S Type Jag  Volvo gone but not forgotten........
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