There is a misconception about inflation. One of those crucial items in the inflation basket is food. It is calculated by Statista that the rate of inflation for food in the UK between March 2021 and March 2022, increased by 5.9 per cent (see chart Mar 2105 to Mar 2022). It is clear from this that there was a period of continuous deflation between March 2015 and January 2017 that preceded a return to a sustained rise of the cost of food from February 2017 onwards. So was Brexit a factor?

The Statista report was before the pandemic and Ukraine. At the time, supply chains and food prices across the world were very stable. So why the sudden increase? Cabinet minister Jacob Rees-Mogg echoed only three weeks ago what he said before the EU referendum in 2016 that today’s soaring food prices have “nothing to do with Brexit”, blaming global inflation rates instead.

However, researchers from the London School of Economics and other universities published a report this week that fully contradicted Rees-Mogg’s claim and pinned the blame on one area – and one area alone. Extra trade barriers created by Britain’s exit from the European Union and subsequent trade agreement have added 6% to the cost of food.

The research made a number of comparisons between food imported from the European Union with prices of food from further afield and focused on price changes.

What the research found was that food mostly imported from the EU, such as fresh meat, fruit and jams saw bigger price rises than those from outside of the EU.

“This research demonstrates a clear and robust impact of Brexit-induced trade frictions increasing food prices for UK consumers during a time when the economy is already facing inflationary pressures from global sources,” one of the researchers, Nikhil Datta, said.

Officially, overall inflation hit a 30-year high of 7% in March, with the cost of food being 9 per cent higher than it was a year ago.

Reuters reports that – The research showed that the biggest spike in the price of food imported from the EU came in January 2021 after an 11-month post-Brexit transition period ended and a free trade agreement negotiated by Prime Minister Boris Johnson’s government came into force.

While the trade agreement means there are no tariffs on goods moving between Britain and the EU, customs delays and food-safety checks have periodically led to lengthy delays for freight traffic at the port of Dover, the main link to France. Customs paperwork is also required.

What the research determined was that the 6% rise in food prices was actually attributable to increased trade barriers that took place between late 2019 – just before Britain formally left the EU – and September 2021.

The research did find another important factor. The inflationary impact from Brexit itself was non-existent on non-food imports. The researchers said that this probably reflected how perishable foodstuffs were more sensitive to delays.

Jonathan Portes of UK in a Changing Europe, an academic body which supported the research said – “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“

You can read the full report HERE