Cost of shopping set to take a pound-ing
FROM trade deals to immigration, experts and politicians still can’t seem to explain what the effect of the UK’s decision to exit the EU will mean.
But one thing looks certain – the prices you pay at the checkout will be going up.
The pound has fallen in value as much as 10% since last month’s Brexit vote, reaching a 31-year-low at one stage.
While that’s good news for companies who sell to foreign countries, it’s bad for importers.
That includes brewers, bakers, biscuit makers and your local supermarket.
The food and drink industry, which employs 35,000 people in Scotland, imports millions of pounds worth of goods every week which end up in your shopping basket.
And the financial turmoil means it’ll inevitably take more pounds to buy these items. But that’s just the tip of the iceberg.
David Thomson, of the Scottish Food and Drink Federation, warned: “This is a complex problem, affecting everyone.
“Many are predicting food prices will rise in the longer term. But there are wider implications. A quarter of our workforce are from the EU, what will happen to them?
“Regulations concerning food safety and authenticity will have to be reorganised, and what will happen to access to the European market place?
“For business here, we import lots of ingredients, stuff they just can’t get in volume or quality needed.
“If that becomes much more expensive, which it seems to be becoming, it will stress out manufacturers.”
And John Munro, of the British Retail Consortium, added: “Supermarkets import more food than they export.
“Since the pound is at a lower value, it costs more to buy products and raw materials.
“For instance, Christmas Pudding contains dried fruit. That fruit comes from abroad.
“The supermarkets can absorb the costs of that in the short- term, but in the longterm the cost of making one of these may well have to go up.”
And even if the pound bounces back, squabbles over new trade deals with the EU may see businesses in Europe, such as wine exporters, look to markets in China and the USA.
Here we speak to six Scottish firms to explore the early impact of Brexit and take a look at where costs are most likely to rise.