Brexit: the elephant in the room surrounding soaring industry inflation pressures
This week, latest UK government figures revealed that food and drink inflation hit 16.4%, the worst in four decades, and sparking a considerable wave of concern from industry.
As Karen Betts, chief executive of the FDF industry body for Britain noted, the alarming figures represented a ‘worrying upward trend’ – with confectionery, snacks, as well as basic food staples all going through the roof in terms of prices, that set back any hope of a national plan for growth being unveiled, as sadly all too unrealistic, as the spectre of recession looms.
“Manufacturers continue to do what they can to contain price rises for shoppers, and we are very conscious of their impact on low income households in particular. But on average manufacturers have seen a 21% rise in their costs over the past year, with the high cost of energy particularly significant. This has meant that some costs are having to be passed onto consumers,” explained Betts of the FDF, on the troubling situation.
As recently covered, the factors behind the situation are indeed multiple – from high energy prices pushing up the cost of living and trading significantly, ingredients shortages, as well as compromised supply chains impacted by the notable ongoing turbulence caused by the war inflicted on Ukraine.
But the other major factor in the puzzle that the UK government appears deeply unwilling to acknowledge – despite official figures from the office for budget responsibility demonstrating otherwise, is the long shadow cast by Brexit, which has merely enhanced our trading woes tenfold rather than resolve any of them.
It’s the subject that many have come to love to hate the very mention of, but the ‘sunny uplands’ promised have not come to pass. It may well be six years on since the vote to leave the EU – but finding anyone in the present administration who can point to a cast iron, tangible economic benefit of leaving the trading bloc is about as likely as a discovery of a unicorn.
It seems that it in spite of all the sound economic data to the contrary, the country’s lack of growth (we are in negative territory compared to the rest of Western Europe), is, seemingly according to the government, entirely down to global economic turbulence and nothing more.
If only it were that simple, and one can only hope that there is a belated realisation that we’ve been significantly negatively impacted by our collective choice to leave the EU.
As the FDF noted, the government needs to act fast on the issue – including simplifying business regulations, helping businesses invest, and in its view, seek to ‘reduce the cost of doing business with the EU’ – which still, whether the government wishes to acknowledge it or not, represents roughly half our trade.
The most direct answer to this is seeking access to the European single market – which should in the view of many, been part of any post Brexit trading arrangements. Our failure to enshrine this has left the after effects plain for all to see – trading with Europe has now become immensely more expensive, as well as complicated, rather than exactly the opposite as was indicated would be the case.
Neill Barston, editor, Confectionery Production