Temp should stay between 88-92 degrees under any conditions.
Most probably your main thermostat or both have failed. Replacing them will fix the temp and improve the consumption.
There's a huge thread on that here - use the search function entering "525d, thermostat, temperature" or similar.

 

Gave the car a bit of a thrashing today on the way home from work and the highest temp i could achieve was 83 degrees and when coasting down a longish hill the temp dropped to 75 degrees.I read in another thread that if it does that its almost certainly one or both thermostats.

 

Remapped pre lci E60 530D here, I changed my front thermostat approx 15 min job and my temp increased as well as my mpg, I now get on average 40 - 42 on a long run and 30ish around town short journeys.

1.) Change your front thermostat
2.) Make sure OBC is reading in UK MPG not US MPG.

Let us know how you get on.

 

Changed the egr thermostat today. I got alot more traveling to do monday and tuesday so a perfect time for testing if its sorted it

 

First real trip in my 520d and I got 53 mpg. Bit of town, rural and motorway driving so I'm pretty pleased with that. Remap coming so I'm curious how that changes things

 

Today i changed the main thermostat and the temp is now staying between 88 & 91 so thats that fixed just hope the fuel consumption is sorted now aswell

 

check
Spritverbrauch berechnen und Autokosten verwalten - Spritmonitor.de
and find all fuel consumptions for all car types; usually by 100s of drivers!

 

8.5l/100km is a normale average for the 525dA pre-LCI, better is possible but worse also. Doubt a thermostat change will be much influence.
Would be good to hear back if did help or not.