Kaupthing predicts higher prices for groceries

The daily bulletin of Kaupthing Bank predicts annual inflation will measure 3.6 per cent in July. Kaupthing attribute a rise in inflation to higher grocery prices as they believe the recent price war between Iceland’s main grocery retailers is coming to an end. The continuing rise in the price of real estate is another contributing factor to higher inflation according to Kaupthing. Price hikes for oil and gasoline will have less impact since gasoline is heavily taxed and oil is neither used for heating houses nor generating electricity.