I've had my Fiat Punto II 1.2 16V for just over a year now and it's developed a few problems that, after a bit of researching, points to a Lambda sensor problem?

The car has developed a mis-fire, fuel consumption has risen and the performance has generally dropped hugely.

Am i right in thinking its a Lambda issue, and if so how much would a replacement cost?

Any help would be awesome!!

Lambda shouldn't cause a misfire.

When was the car last given a full service?

Have your ECU read at a good workshop/dealer to be sure about the lambda sensor...!!

I'd suspect plug leads. Start the car up in the dark, open the bonnet, look for blue flashes. Any blue flashes are HT leaks, and give a good indication of where the issue is (HT leads and coil packs are likely culprits).