As the credit crisis takes hold, four in ten Britons worry that they will be worse off this year, a recent study by Which? Money has found.
The UK mortgage
market has taken a considerable hit in recent months, having been left reluctant to lend to each other, and the millions of re-mortgagers and potential first-time buyers, due to the collapse of the US sub-prime mortgage market.
Gone are the days of high loan to value (LTV) ratios and in are the days of high fees and hefty deposits, causing thousands of Brits to be out of pocket and struggling to make ends meet as they strive to get onto the property ladder.
Which? Money editor, Martyn Hocking said: "We've all learnt about the credit crunch in the news, but people taking out a new mortgage deal are now seeing its impact. Mortgage payments are often your largest monthly expense, so understandably some people are worried about them going up."
The figures from Which? Money come at the same time as news of high inflation on commodity prices, including food, causing a rise of almost £800 a year in the average household's grocery bills.
Research from mySupermarket.co.uk has shown that the average price of a staple food basket of 24 items has risen by 15 per cent in the last year. Johnny Stern, director at mySupermarket.co.uk, said: "Once again we're seeing increases in the price of the average family's food basket, with wheat and dairy based products going up as much as 61 per cent.
"Many families already struggling under the pressure of rising costs are seeking ways to cut their grocery bills. The challenge is that whichever supermarkets you shop in, product prices are constantly moving and it’s very difficult to manually keep track of the best priced products."
Prime Minister, Gordon Brown, is to address this issue today by hosting a meeting of food producers, retailers and consumers in order to discuss the growing world food crisis.
In an article published on Number 10's website, Brown said: "At the moment we're hearing a lot about the world financial crisis that threatens to roll back progress made in recent years to lift millions of people out of poverty and, through increased inflation, affect us all."
Commenting on the global effects, Brown continued: "Food prices today are the highest they've been since 1945, with the prices of rice and wheat now double what they were only a year ago. When the cost of food accounts for more than half of a poor family's spending, it can be truly devastating for millions living on the edge."