THE COST OF BREXIT TO THE AVERAGE UK CONSUMER



The UK will be leaving the European Union on 29th March 2019.

Every day we hear news about the never-ending negotiations between the Government and Brussels, but what impact will our exit from the EU have on ordinary, hard-working citizens and pensioners?

THE COST OF FOOD

The UK imports more food than we export – and the vast majority of that comes from our European neighbours.

When the decision to leave the EU was made in 2016, the pound dropped some 15% against the Euro and other currencies. This effectively increased the cost of our food imports overnight.

However, most of the major supermarkets were holding a lot of stock, so they were able to hold costs down for a while and, in order to keep their market share, they also cut their profit margins thus maintaining lower food prices.

Of course, this couldn’t have been maintained forever, and last year food prices inevitably began to creep up. Vegetable prices increased by just under 6%, tea and coffee by 8.5%, and the cost of meat rose by almost 4%.

To many shoppers, these price increases may not appear evident because many producers reduced the size or content of their products to maintain lower prices.

TRAVEL AND HOLIDAYS

With the immediate collapse of the pound following the Brexit vote, the real cost of taking a holiday abroad inevitably shot up as well, as anyone who had booked a holiday would know.

Though the value of the pound has increased of late, it is still worth less than before, so it pays to shop around when exchanging your money. Check price comparison sites such as www.moneysupermarket.com to get the best deals.

As a result of the drop in sterling, more people than ever are choosing to take their holidays in the UK. However, you shouldn’t assume that a ‘staycation’ is likely to be cheaper than a holiday abroad, even taking into account the fall of the pound.

Hotel and restaurant charges even at home are still often higher than overseas.

FUEL, ENERGY AND HEATING

Despite recent investment in the power infrastructure and renewable energy, the UK still imports a great deal of its energy from the EU – 12% of its gas and 5% of its electricity.

A recent report from the House of Lords warns of rising fuel costs and possible fuel shortages as a result.

However, rising fuel prices cannot be put down to our exit from the EU alone. Prices have increased all over the world, and this trend is likely to continue; so once again, it pays to shop around and switch suppliers to get a better deal.

Switching energy suppliers is not as daunting as some may think and well worth the effort, so go to any of the price comparison websites to find the deal that suits you best.

If you are a motorist, you cannot have failed to have noticed the massive increase in petrol and diesel prices over recent months, with the price of unleaded petrol now at £1.29 per litre and diesel now costing £1.32 per litre.

Go to www.petrolprices.com to find the best prices near you.

Our departure from the EU will inevitably have financial consequences, though the final deal has yet to be agreed. A ‘hard’ Brexit, as many people are asking for, would likely prove costly for the UK and its citizens, whereas a ‘soft’ Brexit with the continuation of a customs union with the rest of the EU may prove to be a better option.


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