British shoppers begin to feel post-Brexit pinch
LONDON: From computers and cars to carpets and food, Britain’s decision to leave the EU is beginning to hit consumers in the pocket, having already spread uncertainty through the property market.
The consequences of the shock vote have so far been mainly theoretical, but recent data suggest that the country’s tumbling currency is about to reach the High Street.
The pound has lost 10 to 15 per cent of its value against the euro and the dollar since the June 23 referendum, raising the price of goods primarily supplied by foreign companies such as automobiles, computers, clothing and some foods.
Carmaker Peugeot told AFP that it had raised prices by an average of two per cent since August 1 for models of its three flagship brands: Peugeot, Citroen and DS.
Similarly, Dell computer group said it now had to factor the cost of components, denominated in dollars, into the price of its products in Britain.
British group Headlam explained that the pound’s plunge had also increased the cost of its domestic floor coverings, imported mainly from Belgium and the Netherlands, by around six per cent.
All eyes are now turning to food and property, which have been relatively unscathed, but which many fear could see similar price fluctuations.
Fierce competition among supermarkets desperate to maintain market share normally provides a bulwark against sharp inflation in food prices, but Brexit could rewrite the rules, said Fraser McKevitt, an analyst at Kantar group’s London office.
“We wouldn’t expect to see anything come through immediately, but if sterling does remain weak, we are likely to see impact on some prices,” he told AFP.
“Around 40 per cent of food in the UK is imported.”
Price comparison website mysupermarket.com has already reported an increase of one per cent in the price of an average basket of supermarket goods in July, blaming ‘fears of Brexit’ for the second consecutive month of price hikes.
There are also fears over the UK housing market, but deflation is more of a concern than price rises in this key sector.
Figures released Monday showed that residential rents for new lets in London had fallen for the first time in six years, according to the first study published on the issue since Britain voted to leave the European Union.
While good news for tenants, it will leave landlords worse off.
In addition, homeowners have seen the value of their property rise on average by just 2.1 per cent in the year up tol August, a slowdown from the breakneck growth of recent years, according to property website Rightmove.
Despite Brexit’s tremors being felt in the economy, official figures do not yet reveal wild price fluctuations, reporting only a slight rise in inflation of 0.6 per cent in July. — AFP