Brexit border checks on imports from the European Union will push up food prices in Britain, says a retail chief.
Helen Dickinson, chief executive of the British Retail Consortium, said the new red tape at Britain’s borders would be one of the factors slowing the fall in food price inflation.
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Ms Dickinson stressed that while the level of inflation on the weekly shop would fall, meaning prices were going up more slowly, they would not actually drop.
Her comments came as shop price inflation eased to its lowest rate since December 2021 driven by falling food costs and competition between retailers.
Shop prices were 1.3 per cent higher than a year ago in March, slowing from February’s 2.5 per cent and well below the three-month average of 2.2 per cent, according to the BRC-NielsenIQ Shop Price Index.
Food prices overall were 3.7 per cent higher than a year ago, down from five per cent in February, the 10th consecutive month of slowing inflation for the category and its lowest since April 2022.
Fresh food inflation slowed further to 2.6 per cent from 3.4 per cent a month earlier.
Ms Dickinson said the lower inflation was down to intense competition across the retail industry and the impact easing from of a number of “global shocks,” including Putin’s Ukraine war and the Covid pandemic.
However, she added: “We won’t see significant falls in prices back to pre-Covid sort of levels, to do that would require the sort of deflation that we haven’t seen since the Great Depression.
“The reason for that is lots of the costs like wages and some of the impacts of things like energy, and all of those other commodity increases through the supply chains, those are baked in now so they won’t reverse.”
She added that there were several other measures “kicking in” in April that would put upward pressure on prices.
“The National Living Wage rise takes effect now, the business rates uplift, we have got new border checks coming in in terms of imports from the EU,” she explained.
“All of those things on the upward pressure trajectory for slowing the progress that we are seeing on shop prices.
“The risks are on the upside.”
Brexiteers argued that a key reason to quit the EU would be cheaper food prices and less Brussels red tape.
However, now it is clear that new border checks are set to push up food prices in Britain.
From April 30, the Government will introduce documentary, physical and identity checks at borders for medium risk animal products, plants and plant products imported to Great Britain from the EU except goods that enter the country through west coast ports.
