LONDON — New trade barriers resulting from Brexit have caused UK food prices to rise by 6%, researchers have found.
A new report from the UK in a Changing Europe think tank said the rise was not due to the coronavirus pandemic. The findings put pressure on British Prime Minister Boris Johnson, who led the pro-Brexit campaign and is now grappling with a cost of living crisis.
The so-called Trade and Cooperation Agreement (TCA) between Britain and the EU has led to checks on goods from the UK to the bloc from the start of 2021 – as well as an increase paperwork for merchants.
According to the report, the increase in trade barriers led to a 6% increase in food prices between the end of 2019 and September 2021, compared to the years before December 2019.
Products which represent a larger share of EU imports, such as fresh pork, tomatoes and jams, have been more affected than those which represent a smaller share of EU imports, such as tuna and exotic fruits like pineapple, the researchers added.
“Covid-19 is ruled out as a driver of price change as key pandemic events are clearly uncorrelated to changes and additionally we are able to control for macro impacts on a scale of the economy such as nationwide shutdowns,” the report said.
This follows research from the London School of Economics (LSE) published this week which found that Brexit had caused a “major disruption” to UK trade with the EU. He said the new relationship had led to a “sudden and persistent” drop of 25% in UK imports from the EU compared to the rest of the world.
The drop in UK exports to the EU was smaller and short-lived, the LSE researchers said. “Nevertheless, there has been a sharp drop in the number of business relationships between UK exporters and European importers, suggesting that the introduction of the TCA has caused many UK businesses to stop exporting to the EU” , they added.