LONDON — A no-deal Brexit will cost the average British household £260 a year, and millions would be more than £500 a year worse off, a major new study has found.
“Changing Lanes”, a report by the Resolution Foundation and the University of Sussex, suggests that leaving the EU single market and customs union and moving onto World Trade Organisation tariffs would lead to price rises across a large range of goods and hit low-income households the hardest.
These five charts show what could happen to the cost of living if the UK withdrew from the EU without a deal.
Many UK households would see costs increase by more than £500 a year
3.2 million households would experience price rises of more than £500 a year if the UK left the EU on WTO terms according to the report, which is a sizeable minority.
The average British household would find their bills increase by £260 a year.
Clothes, drinks, transport and household goods all go up
The biggest price rise will be for transport vehicles and their accessories if the Brexit were to happen without a deal.
While clothing, footwear, alcohol and tobacco would also all encounter significant tariff increases, although their prices would not go up quite as much.
Vehicles would be hit hard by no-deal as UK consumption is supplied in a large proportion by goods from the EU.
Food including dairy and meat would experience huge price rises
Dairy products would experience the biggest price increases due to the huge rise in the tariffs applied to them in a no-deal scenario.
Oils and fats would also see a significant rise in prices, as would meat products. Beef prices would go up by 14%.
If all goods and food were to revert to the ‘Most favoured nation’ tariffs inside the WTO, then the study shows that the average price rise would be 2.7%.