Living costs tightening first time buyer budgets

04-Jul-2007

Living costs in the UK are increasing at twice the rate of those in the rest of Europe, a new study has indicated, suggesting that first time buyers have more than rising house prices to cope with.

The report from the Organisation for Economic Co-operation and Development (OECD) comes as the Bank of England prepares to make a decision on interest rates for July, with analysts widely predicting a rise to 5.75 per cent.

Food bills rose by 4.9 per cent over the past twelve months and energy bills by 4.4 per cent, the OECD revealed.

Meanwhile the Nationwide Building Society has revealed that consumer confidence fell for the first time in six months as Britons predicted tougher times ahead.

"The fall in confidence in June reflects some weakening sentiment about the economy and jobs, both now and in the future," advised Fionnuala Earley, chief economist at Nationwide.

"Higher interest rates are likely to be a major factor behind this as consumers recognise their impact on the wider economy as well as on their own pockets," Ms Earley added.

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