Brexit bites: Housesholds take financial pummelling
PUBLISHED: 09:22 20 November 2017 | UPDATED: 09:22 20 November 2017
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The true cost of Brexit is becoming clear with some households already more than £800 a year worse off partly as a result of the referendum.
A new economic study has revealed the average household is paying £404 a year extra due to price inflation.
At the same time the average worker has lost £448, the equivalent of one week’s pay, due to a stagnation in wage growth.
Liberal Democrat leader Sir Vince Cable said the report “nails the lie” that Brexit has not already hit the economy.
Dr Thomas Sampson, who co-authored the Centre for Economic Performance research, said: “Even before Brexit occurs, the increase in inflation caused by the Leave vote has already hurt UK households.
“Our results provide compelling evidence that, so far, UK households are paying an economic price for voting to leave the EU.”
Dr Sampson’s research revealed that the rise in inflation has been lowest for households in London while Scotland, Wales and especially Northern Ireland have been worst hit.
According to the report the largest inflationary effects have been on product groups with high import shares.
These include bread and cereals; milk, cheese and eggs; coffee, tea and cocoa; beer and wine; furniture and furnishings; and jewellery, clocks and watches.
The rise in food prices has led think tank the Food Foundation to raise concerns that “five-a-day” may become unaffordable for millions of Britons.
In a new report the foundation claimed that in a no deal Brexit scenario price rises would mean the poorest 10% of the population could spend half of their entire food and drink budget to meet current Government guidance for fruit and veg.
Anna Taylor, executive director of the Food Foundation, said: “The Government faces a clear choice to boost British harvests of fruit and veg or the NHS will reap the consequences.
“It is absolutely crucial that the Government grabs the bull by the horns before the Brexit boat sails.”
Sir Vince said: “This comprehensive study finally nails the lie that the Brexit process has not damaged the economy, and with it the living standards of every British citizen.
“The average household simply can’t afford to lose £404 a year at a time when many have not recovered from the financial crisis of almost a decade ago.
“But it didn’t have to be this way: if the Conservative government had responded by guaranteeing that Britain would remain in the single market and customs union, the pound would not have fallen so sharply and inflation would not have risen.
“That was not the fault of how people voted but how the Government responded to the vote, embarking on the most extreme and damaging version of Brexit.”