Post-Brexit trade barriers increase the price of food imported from the EU: report | brexit

Brexit has pushed up the price of food imported from the EU, exacerbating the cost of living crisis unfolding in Britain, according to a report.

The UK in a Changing Europe (UKICE) think tank said trade barriers introduced after leaving the EU had led to a 6% rise in UK food prices between December 2019 and September 2021, added to the growing financial pressure for households.

The report found that products with a higher share of EU imports, such as fresh pork, tomatoes and jams, were more affected than items where UK imports more commonly 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 contraction in living standards since the 1950s amid skyrocketing inflation fueled 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 a gauge of rising cost of living, could hit 10% this year amid rising prices. of gas and electricity caused 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 price rise.

He said that 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, it found that the two most notable increases coincided with Boris Johnson’s election victory in 2019, when a “hard Brexit” became more likely and post-Brexit implementation. trade agreement in January 2021.

ONS figures show that consumer food prices fell in the period analyzed by the academics. Prices have risen sharply in recent months as the cost of living spirals higher. 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 arriving from the EU as ministers sought to minimize disruptions. The prime minister hinted last week that Brexit physical border controls on EU food imports due to be introduced in July would be delayed for a fourth time amid fears supplies could be affected.

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Other economists say it is difficult to separate the effects of Brexit from other factors such as the covid-19 pandemic, Russia’s war in Ukraine, movements in financial markets, global trade bottlenecks and shortages of workers and supplies. in advanced economies. Official forecasts suggest that fuel and utility bills will account for almost half of this year’s rise in inflation.

Although the government has emphasized this point, pro-Brexit ministers had previously said leaving the EU would reduce food costs by opening up the British market to exporters from around the world. Government sources said agricultural commodity prices were linked to global gas costs. “Blaming Brexit is simply wrong,” they added.

Figures from accounting firm UHY Hacker Young show UK businesses and consumers paid £4.8bn in customs duties on imported goods last year, a new record and an increase from £2.9bn. sterling from the previous year.

Sean Glancy, a partner at the accounting firm, said some of the increase was due to a post-pandemic recovery in trade, but most of it was probably due to leaving the EU. “Brexit-related customs tariff increases could not come at a worse time for British businesses and consumers. Inflationary pressures caused by Covid and the war in Ukraine are exacerbated by those additional import tariffs,” he said.

Jonathan Portes, Senior Research Fellow 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 rise in property prices. food, which will affect the poorest families are the most difficult”.

A government spokesman said: “Food prices fluctuate in any given year and depend on a number of factors, including exchange rates and commodity prices. The sustained rise in global gasoline prices has led to rising input costs for the dairy and egg industries, including feed and fuel costs.

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