Brexit has added £210 to average grocery bills, new study finds
Brexit has added £210 to average grocery bills, new study finds
Monday 5 Dec 2022New research co-authored by Dr Nikhil DattaLink opens in a new window of Warwick Economics, CAGE and the LSE hit the headlines last week with its key finding that leaving the European Union has added an average of £210 to Britain’s household food bills over the two years to the end of 2021 – a cost felt more deeply by lower-income households, which spend a greater share of their income on food than the better-off.
In total, the researchers estimate that Brexit has cost UK consumers £5.8 billion.
The study - Non-tariff barriers and consumer prices: Evidence from BrexitLink opens in a new window - published by the Centre for Economic PerformanceLink opens in a new window at the LSE, finds that food prices have increased by six per cent and calculates that for the poorest households, this results in a Brexit-induced rise in the overall cost of living of 1.1 per cent - 52 per cent more than the 0.7 per cent rise felt in the top 10 per cent of households.
The authors also explain the factors driving the price increases.
Although the 2021 Trade and Cooperation Agreement ensures that trade between the UK and the EU remains tariff-free, so called ‘non-tariff barriers” such as import and expert checks, rules of origin requirements and sanitary and phytosanitary measures for trade in animals and plants all add time and cost to imports and exports.
Between 50 per cent and 88 per cent of these costs have been passed on to consumers.
Commenting on the analysis, Dr Nikhil Datta Link opens in a new windowsaid: “The policy implications are stark: non-tariff barriers are an important impediment to trade that should be a first-order concern, at least on par with tariffs, for policymakers interested in low consumer prices.
“We calculate that Brexit caused a loss of £210 for the average household, or £5.84 billion overall, when looking at its impact on the food market alone. Since poorer households spend a larger fraction of their income on food, they are hit harder.”
Read the full discussion paper here:
Non-tariff barriers and consumer prices: Evidence from BrexitLink opens in a new window.
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