Brexit to blame for a third of Britain's food bill rise, researchers say

[May 25, 2023]  By James Davey
 
LONDON (Reuters) - Britain's departure from the European Union has accounted for about a third of the increase in food bills for households since 2019, equivalent to about 250 pounds ($316), researchers from the London School of Economics and other universities said.

A person wearing a backpack looks at food goods in a shop as UK inflation heads towards 10% in London, Britain, June 16, 2022. REUTERS/Kevin Coombs

Britain has been battling inflation for over a year, partly driven by its highest rate of food price growth since 1977, with food prices up more than 19% over the last year.

Although London and Brussels have an agreement allowing largely tariff-free trade in goods, barriers to exports and imports in the form of paperwork, known as non-tariff barriers, have caused delays and higher costs.

The Centre for Economic Performance (CEP) study compared price changes for food products imported from the European Union with prices of food from further afield.

Before Brexit these products had similar price trends but after Brexit, there was a relative increase for products more exposed to imports from the EU, it said, and that has continued into 2023.

The study found that between January 2022 and March 2023, the price of food products that were exposed to Brexit increased by approximately 3.5 percentage points more than those that were not.

When considering the impact on food prices since December 2019, just before Britain formally left the EU, they estimated the cost of Brexit to UK households at 6.95 billion pounds ($8.77 billion), or 250 pounds per household.

Between December 2019 and March 2023, it said UK food prices rose by almost 25 percentage points.

"Our analysis suggests that, in the absence of Brexit, this figure would be 8 percentage points (30%) lower," the CEP said.

Products with high non-tariff barriers, such as meat and cheese imported from the EU, saw price increases about 10 percentage points higher than similar products that were not exposed to Brexit since January 2021, when Britain's trade and cooperation (TCA) agreement with the EU started.

Last week Prime Minister Rishi Sunak's spokesperson said Britain's departure from the European Union had not been a failure, rebuffing criticism from prominent eurosceptic politicians about how Brexit had been implemented.

Overall British consumer price inflation hit a more-than 40-year high of 11.1% in October, according to official data. It had slowed to 8.7% in April.

($1 = 0.7923 pounds)

(Reporting by James Davey; editing by Barbara Lewis)

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