1 in 3 Brits think companies are cashing in on inflation

One in three Brits are convinced companies are cashing in on high inflation to ramp up their profits. And half think the government should do more to control petrol and diesel prices.

The rocketing cost of many essentials, from petrol to bread, has pushed consumer price inflation to over 4%.

Indeed, many companies - from home appliances maker Electrolux to Premier Foods, the company behind Hovis bread, Mr Kipling cakes and Branston pickle - have been raising their prices in response to rising commodity costs. But whether they are doing this to inflate profits rather than just offsetting rising raw material costs is another matter.

A survey of 3,000 adults by gocompare.com shows that far from believing that 'we're all in this together,' over a third (36%) of Brits think that companies in various sectors are using 'inflation' as an excuse to put up prices and improve their bottom line.

An even higher 38% of Brits think that fuel retailers use situations such as unrest in the Middle East as an excuse to push up the price of petrol and diesel. Nearly half think the government should reduce fuel duty to help cut motorists' spiralling costs.

John Miles, Gocompare.com's business development director, said: "It's clear that many consumers are struggling to cope with the effects of high inflation and high fuel and energy costs. However, this research shows that a significant number of customers believe companies are taking advantage of the tougher economic climate to pass more costs on to them and boost their profits.

"This mistrust may well prompt more consumers to ditch their long held loyalties and shop around for better deals and we would certainly encourage this. Companies which know they have to compete for your business will be forced to offer more competitive deals and prices and consumers should shop around for everything."

When asked about their own financial situation, 41% of consumers said they feel worse off now than they did this time last year, and 45% feel their situation has remained about the same. Just 13% feel better off now than they did 12 months ago when the coalition government came to power.

With nearly a quarter of consumers saying they are having to make cutbacks just to make ends meet, the majority of Brits don't want to see an interest rate rise. A quarter are happy for interest rates to stay where they are and 17% would like them to fall still further from the record low of 0.5%.

One in five Brits would like to see interest rates go up, but that figure more than doubles to 46% for those over 55, reflecting their reliance on savings.

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