Well when we went to Reykjavik our lunches (bagel, cake and coffee) were cheaper than what the same food would have cost in somewhere like Costa and the quality far higher because it was all made fresh on site not brought in factory food.
Restaurants were probably about 50/100% more than mid price UK places for meals out and drinks, likewise supermarket food, so 70 euro would buy a bottle of wine, not a glass. So if you're used to London prices I'd agree that Iceland at least is 'not much more expensive'.
You could get a city card that would allow you to see many museums, use buses and go swimming for about £30 a day. Trips out probably weren't massively more expensive than days out at places like Alton Towers and far more memorable, better organised - no queuing for hours for example, food was good quality and everywhere was clean and well maintained, no litter and when we got back to the UK we realised how shabby places looked in comparison