According to a report, Brexit has driven up the price of food imported from the EU, deepening Britain’s cost of living crisis.
The UK in a Changing Europe (UKICE) think tank said trade barriers introduced after leaving the EU led to a 6% rise in food prices in the UK between December 2019 and September 2021, adding growing financial pressure on households.
The report found that products with a higher share of EU imports, such as fresh pork, tomatoes and jams, were more affected than products where UK imports more often came from the rest of the world. , such as tuna and exotic fruits such as pineapple.
Households across the UK are on track to suffer the worst squeeze in living standards since the 1950s amid runaway inflation driven by rising energy, food and fuel prices . Annual inflation hit 7% in March, the highest rate since 1992. Economists have warned that inflation, which acts as an indicator of the rising cost of living, could reach 10% this year due the rise in gas and electricity prices triggered by the war in Ukraine.
The report, produced by researchers at the Center for Economic Performance at the London School of Economics with funding from UKICE, found that a “clear and robust impact of Brexit-induced trade frictions” had led to the increase prices.
He said Covid-19 could be ruled out as an influencing factor because there was a correlation between price increases and the share of EU imports for a particular product. Analyzing trade figures compiled by the UN and price data from the Office for National Statistics, he found that the two most notable increases coincided with Boris Johnson’s election victory in 2019, when a ” Hard Brexit” has become more likely, and the implementation of post-Brexit. trade agreement in January 2021.
ONS figures show that consumer food prices have fallen over the period analyzed by academics. Prices have risen sharply in recent months as the cost of living soars. Analysts said this suggested that, in the absence of Brexit, food prices could have fallen further.
The UK has repeatedly delayed import checks on goods from the EU as ministers seek to minimize disruption. The Prime Minister hinted last week that physical Brexit border checks on food imports from the EU, which were due to be introduced in July, would be delayed for the fourth time amid fears supplies could be affected.
Other economists say it is difficult to disentangle the effects of Brexit from other factors such as the Covid-19 pandemic, Russia’s war in Ukraine, movements in financial markets, bottlenecks in the global trade and labor and supply shortages in advanced economies. Official forecasts suggest that fuel and utility bills will account for nearly half of this year’s inflation hike.
Although the government has insisted on the point, pro-Brexit ministers have previously said leaving the EU will lower food prices by opening the UK market to exporters around the world. Government sources said agricultural commodity prices were tied to global gas costs. “Blaming Brexit is just plain wrong,” they added.
Figures from accountancy firm UHY Hacker Young show UK businesses and consumers paid £4.8billion in customs duties on imported goods last year, a new record, from £2.9billion one year earlier.
Sean Glancy, a partner at the accounting firm, said part of the rise would be due to a post-pandemic recovery in trade, but most of it was likely due to leaving the EU. “Brexit-related tariff increases could not come at a worse time for UK businesses and consumers. Inflationary pressures caused by Covid and the war in Ukraine are exacerbated by these additional import duties,” he said.
Jonathan Portes, Principal Researcher at UKICE, said: “While Brexit is not the main driver of rising inflation or the cost of living crisis, this report provides clear evidence that it has led to a substantial increase in food prices, which will hit the poorest families the hardest.
A government spokesman said: “Food prices fluctuate in any given year and depend on a range of factors including exchange rates and commodity prices. The sustained increase in world gas prices has led to increased input costs for the dairy and egg industries, including feed and fuel costs.