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13 February 2008

Following the Bank of England’s announcement that inflation has exceeded its two percent target for a fourth consecutive month], new research from Kaupthing Edge indicates that 95% of British households are already feeling the financial pinch.

Research by Kaupthing Edge, the online retail financial services offering of Iceland’s largest bank, Kaupthing and its UK subsidiary, Kaupthing Singer and Friedlander, shows that rising gas and electricity prices top the list of inflationary woes, with over three in four people (77%) stating they or their households have seen their utility bills rise over the last six months. And with food price inflation now at an all time high, it is not surprising that two in three people (68%) say they and their family have seen their food bill increase, and almost half (49%) who state their travel costs have risen over the last six months.

But the economic downturn also seems to have reached the work place; a third (31%) of Britons say they have received a smaller pay rise or bonus than usual.

Which of these has your household been noticeably affected by in the last six months?

1. Rising gas/ electricity prices (77%)
2. Increase in food prices (68%)
3. Rising travel costs (49%)
4. Smaller than usual/ no pay rise/ bonus (31%)
5. Rising mortgage costs (22%)
6. Difficulties in obtaining loans (13%)
7. Reduction in overtime (8%)
8. Unexpected rise in costs of loan repayments (6%)
9. Redundancy (5%)
10. None of these have affected me/ us (5%)

Ashley Whittaker, Head of Retail Savings at Kaupthing Edge comments:

"With inflation now at x%, more and more of Britain’s hard earned cash will go towards essentials such as utility bills and the weekly shop. While last week’s base rate cut may bring some welcome relief to Britain’s mortgage holders, our research clearly shows that the vast majority of Britons are still feeling the pinch.

In the current economic climate it is essential that people plan ahead and make sure their savings are working hard for them. Kaupthing Edge currently offers instant access to your savings at a competitive rate of 6.5% AER and rate guarantee of 0.3% above base rate until 2012 and while many providers have passed on last weeks’ 0.25% rate drop, we have made a conscious decision to maintain Kaupthing Edge’s rate at 6.5% to offer our customers a competitive deal on their savings."