Brexit-related trade barriers pushed up food prices, says think tank

Trade barriers linked to Brexit have also pushed up prices of food imported from the EU, the country’s leading think tank revealed today (27), further exacerbating the inflationary pressure and cost of living squeeze on households.

According to UK in a Changing Europe (UKICE), trade barriers introduced after leaving the EU had led to a 6 percent increase in food prices between December 2019 and September 2021 in the UK.

Worse-affected foods were fresh pork, tomatoes and jams, which have higher EU import share. 

“The reason for these price increases is straightforward- additional barriers at the border such as checks, increased waiting times, and additional paperwork are costly for producers,” says the report.

The report, produced by researchers from the London School of Economics’ Centre for Economic Performance with funding from UKICE, found that a “clear and robust impact of Brexit-induced trade frictions” had contributed to the increase of prices.

Jonathan Portes, a senior research fellow at UKICE, said that 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 hardest”.

Reacting to the findings, a government spokesperson 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 global gas prices has led to increased input costs for the dairy and egg industries, including feed and fuel costs.”

UKICE’s revelation comes amid the UK’s worst living standards squeeze since the 1950s. Rising prices of energy, food and fuel drove annual inflation to 7 percent in March, the highest rate since 1992. Economists have warned that inflation is likely to touch 10 percent this year amid rising prices for gas and electricity triggered by the war in Ukraine.