According to research conducted by the London School of Economics (LSE), UK households have spent £7 billion since Brexit to compensate for the additional expenses resulting from trade barriers on food imports from the European Union (EU). This has amounted to an overall increase on average of £250 in bills.
The price of food in the UK had surged by 25% since 2019. Official figures indicate that annual food price inflation in the UK is currently approaching historical highs and is above all other industrialised nations. Certain essential goods have increased up to 46% within a year, exacerbating the ongoing cost-of-living crisis.
According to the latest figures from the Office for National Statistics, the consumer prices index, which measures inflation, decreased from 10.1% in March to 8.7% in April. However, despite this overall decrease, food inflation has remained high at 19% over the past year.
LSE has determined that if the trade restrictions following Brexit were not in place, the increase in food prices would have been only 17%. Adding up the impact on all British households implied they had paid an additional £6.95bn as a result.
It was found that price rises observed in products more exposed to Brexit are not associated with other factors such as Covid lockdowns or Russia’s invasion of Ukraine. “The fact that the results are driven entirely by products with high non-tariff barriers imported from the EU offers strong evidence that Brexit is the driving force behind these effects,” the researchers say.
For example, the prices of products like meat and cheese imported from the EU have seen an increase of approximately 10 percentage points more than similar products not exposed to Brexit since the commencement of the trade and cooperation (TCA) agreement in January 2021.
Brexit: looking forward
One of the authors of the report, Nikhil Datta, said there is a possibility that food costs may continue to escalate and explained how not all veterinary checks are being carried out as not everything has been instituted.
EU supporters argue that food inflation will exacerbate further with the implementation of new border checks by the government in October. Meanwhile, the International Monetary Fund (IMF) has called on the UK government to decrease non-tariff trade barriers with key trading partners in order to alleviate inflation.
As the cost-of-living crisis continues, it is imperative the Government acts to reduce the financial burdens being placed on the population. From energy bills to food prices, solid intervention is needed.