Recently bought a mk1 vrs amazing car must I say.

Past week it's been playing up. I plugged it into a handle held diagnostic tool. No codes came up, but the cars mpg has dropped to 23-28. Also the engine temp guage it's very tempernental some days it reads 0 some days it reads normal. Also I recently have found it's it the Y pipe has split would this cause poor performance? There is a light hesitation if I hold the throttle open whilst driving

Cheers newbie =]

Y-pipe needs replacing anyway.

The mpg problems combined with the engine temp guage issue make me suspect that the engine temp sensor is failing, and suppluing bad temperature values to the EMS. I'd suggest having a look in the VAGCOM forum, and seeing if there's someone near you who can monitor it on a laptop.