Happy B*-Day
How to Brexit-proof yourself and prepare for a downturn – just in case it all goes belly up! *when Brexit strikes on March 29
COULD a no-deal or hard Brexit really happen? The way things are going it seems increasingly possible, with Irish shares falling this week on the back of that very fear. There are just 173 days to go until B-Day on Friday, March 29. And as things stand, all hell could break loose. At 11pm on the last Friday in March, Britain will cease to be a member of the EU and a raft of regulations and trade deals will unravel instantly.
Tariffs or import taxes may (or may not) be applied on a range of items, especially food, clothing and vehicles.
Costs will certainly rise due to a host of hassle-inducing factors such as custom delays and the need to meet differing product specifications for different jurisdictions.
Economic think tank the ESRI estimates that prices could go up by between 2% and 3.1% on everything we buy, depending on how hard Brexit is.
The likely impact on annual household spending could be €892 for the poorest families and €1,390 for the highest earners.
Poorer families would be worst-hit, proportionate to their income.
We import 28% of our goods across the Irish Sea and two out of five exporters deal exclusively with Britain. Jobs will certainly be lost if tariffs are imposed alongside a plunge in the value of sterling (although that sterling plunge would ease the pain for consumers).
Worst-hit by trade tariffs ‘well in excess of 10%’ will be essentials such as food and clothing, the ESRI envisages in the event of a hard Brexit.
Car imports are usually penalised by 8% in the absence of preferential trade deals, according to the ESRI. And household appliances see a relatively modest 3% added on. This is additional to any other costs but does not include the impact of currency changes.
To make matters even worse, the aftermath of Brexit looks likely to precede a global downturn with higher inflation, rising oil prices and rising interest rates all kicking in at the same time.
So with all that in mind, here is how to Brexit-proof yourself:
CAR IMPORTS
Thinking of buying or importing a UK car? Don’t delay, because VAT and possibly other tariffs may apply after March 29.
GOODS
Stock up on your favourite British goods in the immediate runup to Brexit if no deal is in sight. Otherwise you might have to elbow other Bovril lovers aside as the last British products disappear from our shelves at the end of March.
According to the ESRI study, milk, cheese and egg prices could rise by 46% if tariffs were introduced. Bread and cereals could go up by 30% in a worstcase scenario, while confectionary and beverages could increase by 20-30% when taxes and extra costs are added in.
HOUSEHOLD BILLS
As we import most of our energy from the UK, further price hikes on top of those already occurring may be on the cards if Brexit goes badly.
But you can save hundreds – more than any increase – just by clicking on a price comparison site such as bonkers.ie or switcher.ie. The latter promises to save you €289 on energy bills alone. While you’re there, why not get the best TV/broadband/ phone deals too and save hundreds more?
HOLIDAYS
Flight disruptions may occur as Britain’s automatic right to land in EU territory evaporates on March 29.
There will also be currency fluctuations. Sterling could fall sharply if there is no deal – or rise if one is done at the last minute. If you’re planning to visit the UK, this could impact greatly on the cost of your holiday.
OIL
Oil prices are already rising fast and Brexit will make matters worse. The price of oil is heading towards $100 a barrel, from $50 not so long ago. So there’s nothing to be gained from delaying that order for a winter oil tank fill-up. Save more by shopping around using web resources such as cheapestoil.ie.