Higher prices likely in a post-Brexit world

By John Glen

- Last updated on GMT

Brexit will mean higher prices, claimed economist John Glen
Brexit will mean higher prices, claimed economist John Glen
Food prices are set to rocket once the UK leaves EU, according to John Glen, economist at the Chartered Institute of Procurement & Supply.

Ordinary shoppers may soon see higher prices on their shelves according to new research from the Chartered Institute of Procurement & Supply (CIPS) as a survey  of more than 2,000 supply chain managers uncovered the impact of Brexit on their businesses.

Buyers from a range of sectors pointed to significant changes in trade and the effects on supply chains since the UK’s vote to leave the EU.

Significant changes in trade

For instance, around 32% of UK businesses with EU suppliers have already increased prices to consumers, in an attempt to hold on to business margins, according to the research.

Until now, companies have been absorbing some of the additional costs, but with another 41% of businesses planning to increase their prices in the coming year, this will result in a further squeeze on household budgets already impacted by higher-than-expected inflation and lingering austerity measures.

For job-seekers, the outlook also appears tricky. One in seven (14%) of EU businesses with UK suppliers are already moving parts of their business outside the UK and 23% said they would reduce the size of their workforce if Brexit costs continue to provoke changes to their business.

More challenges ahead

There are more challenges ahead. Around 22% of supply chain managers admitted that their UK businesses with EU suppliers were finding it harder to secure longer-term contracts past March 2019.

This means that a collapse in UK supply chains, as the UK exits the EU, is a fear and a possibility.

From fresh food to packaged items, it seems that, unless there is greater clarity around trade relations, it is the consumer who will be scouring supermarket shelves wondering what just happened.

Related topics: Supply Chain, Brexit Debate

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