Peugeot 208 knock sensor issue

Sounds plausible. A dodgy connection to the knock sensor could definitely cause those symptoms. The ECU relies on that signal to adjust timing, so if it's intermittent, it will throw a code and affect fuel consumption and idle. Have you tried cleaning the contacts on the plug and sensor? Sometimes that's enough to fix it. Also, do you have a code reader to see what specific code is being thrown?

I haven't tried cleaning the contacts yet, good idea! I don't have a code reader myself. If cleaning the contacts doesn't work, is replacing the sensor itself the next logical step, or could it be something else entirely?

While replacing the sensor is an option, given that you suspect the wiring, I'd advise against throwing parts at it without confirming. It really could be the wiring, or even further up the line. The best bet, especially without a code reader, is to get it to a workshop. They can properly diagnose the fault and pinpoint the exact problem. A defective cable or plug connection of the component is very likely.

Okay, thanks for the advice. I'll take it to a workshop to get it checked out properly. Hopefully, it's just the wiring like we suspect. It was indeed the knock sensor cable. Cost me 95€ to get it sorted. Thanks again!