Brexit – What will I pay more for and how it affects your wallet?
As a nation the UK is reliant on importing goods such as food and clothing. The 2015 Food Statistics pocketbook shows that 46% of food consumed in the UK came from outside of Great Britain. So we do rely on imports.
Following the Brexit vote a weaker pound can mean the cost of importing goods becomes more expensive.
Here are just a couple of items you might have to pay more for in the future. And it’s not good news if you’re a wine drinker.
Fruit and veg
The UK imported 8.7 billion pounds worth of fruit and veg. Compared to exporting 0.9 billion (Food Statistics pocketbook 2015). So it’s easy to see that we depend on imports in this area. Oranges and bananas are just two fruits that we rely on other countries for. Which are also found in smoothies and desserts just to name two other items.
If you have reason to celebrate you may be opening up a bottle of bubbly. If you didn’t know – Champagne is made from grapes produced in the ‘Champagne’ region of France. Some products are known as having a ‘Protected Designation of Origin’ status. This means they have to be manufactured in a certain area to be called a specific name. In the UK you may be familiar with the concept through cheese names such as Stilton or Wensleydale.
Will Brexit affect the cost of Prosecco?
Very possibly. In recent years you could buy ‘Prosecco’ even if it was made using the same grapes outside of the ‘Prosecco region’. Since 2009, for a drink to be labelled as ‘Prosecco’, it has to be manufactured in the ‘Protected Designation of Origin’. These areas are ‘The provinces of Treviso, Venice, Vicenza, Padua, Belluno, Gorizia, Pordenone, Trieste and Udine.’ (Source: www.prosecco.wine) If you’re a fan of Prosecco then it could be worth switching to a different option. Or moving to Italy.
If you’re a fan of English wines you may not be hit with a price increase because of Brexit. If you’re a fan of wines that are not manufactured in the UK such as French, Californian or Australian wine, you may either have to cut down or buy alternatives to cope with any price increases.
Clothing at Sports Direct
Could Brexit really affect how much you pay for sports clothing at Sports Direct? On the Monday, after the vote, the group issued a statement regarding the impact of the referendum. It mentioned that “these factors are likely to impact purchases for which the company is currently not hedged for FY17 period and beyond”.
Essentially this means the vote will affect the price at which Sports Direct can buy stock in 2017 and beyond. If they have to pay more it’s likely to mean you will to.
Will Brexit affect the cost of petrol and car insurance?
There’s a useful article on the confused.com website about this.
Firstly on petrol prices…
“In the months leading up to the EU Referendum, the fall in the value of sterling was blamed on the possibility of a win for Brexit. During the immediate aftermath of the Referendum results, the value of the pound fell by more than 10% – the lowest value against the dollar since 1985. Since fuel is priced in dollars, this drives costs up.”
And secondly on rules regarding insurance depending on your gender…
“In 2012, the European Court of Justice ruled that providers could no longer take customers’ gender into account when setting premiums.”
But as we’ll no longer be in the EU this rule may not apply in future. Meaning potentially cheaper premiums for women – but more for men.
The results of the vote will cause uncertainty in currency and trading markets connected to the pound. How long it will last and the prices of these items could be affected indefinitely as a result. It’s worth mentioning that other factors, such as trade agreements, may positively impact these prices in the future.