BREXIT price rises

Generali

DollarSaver wrote: »

I am trying to figure out what I should buy at this time in order to try and minimize the almost certain increases in prices of everything.

Everything we now import has cost more as the pound has fallen so there will be a knock on. There will also be increased prices due to delays and costs associated with temporary use of WTO default trade agreements. I noticed yesterday that my coffee filters have jumped 50p to £1.50 for 40 they are made in Belgium. I assume this is exchange rate related. I have also noted that many products in Poundland have stopped being stocked, ones that came across as very good value. Maybe they can no longer be purchased and profitted from if they are imported from China for example cause of the pounds fall.

Does anyone have a handle on what will increase in price fastest ? And what would be a good general plan.

I imagine bulk buying anything that you use manufactured or imported overseas that is not perishable would be a obvious, basic and sensible move for starters.

I am wondering how and when fuel will start rising as well.

Any input greatly received.

Items that are:

1. Imported
and
2. The cost of producing the product is closely related to the price
and
3. Traded widely so the UK consumer pays close to the world price

Are the things most likely to rise in price the most. Unfortunately that is likely to be stuff that's hard to store like fuel and food.

FWIW the UK imported about $663,000,000,000-worth of goods in 2014. At an FX rate of $1.50 to the quid, as it was as I was travelling to work on the morning of the Brexit vote, that costs UK PLC £442,000,000,000.

At the current rate of $1.32 those imports cost about £500,000,000,000 so given that there are about 26,500,000 households in the UK, the UK's import bill just went up by about £2,500 per household on average.

Over time that extra cost will fall as people start to substitute imports with domestically produced stuff and simply consume less (a lower standard of living is a necessary and inevitable result of this sort of fall in the FX rate in a net importing country).

As a thought experiment, think about your mobile phone. It is impossible to replace your mobile with one produced in the UK when time comes to replace it. If the price has gone up by 10% maybe you make your old one last an extra few months (so you use a less good phone for longer: a reduction in your living standards) or you pony up more for a new phone and buy less of something else (again a reduction in your living standards) or you save less money (a reduction in your future living standards).

SunReader

Conrad wrote: »

Given the EU imposes tariffs on goods, especially food imports from outside the EU, once were put we can buy at world prices, which on many food items means an 80 % tarif reduction.

I believe non EU cars have a10% tarif imposed, so once we are outside we can deal with say Japan and not have to pay said tarif

Or pay an even higher 'tariff' , import duty will remain, just we now have to spend years negotiating trade agreements on everything form Abacuses to Zoological supplies, with every single EU state...

Even if we get good terms the uncertainty and delays will kill a lot of business for us.

Imagine an EU country trying to fix a several hundred £ million trade deal with a British company for delivery in 5 year's time without even knowing what the future import duty will be?

I hope you didn't vote out in the hope of duty free import cars and 80% cheaper food. :beer:

Thrugelmir

CLAPTON wrote: »

do you not believe in the benefits of free trade even if one sided?

Trade is rarely one sided. In everyone's interests to be flexible.

Thrugelmir

SunReader wrote: »

Or pay an even higher 'tariff' , import duty will remain, just we now have to spend years negotiating trade agreements on everything form Abacuses to Zoological supplies, with every single EU state...

Bulk of global trade is conducted under WTO rules. There is a backstop.

Generali

Thrugelmir wrote: »

Bulk of global trade is conducted under WTO rules. There is a backstop.

Not necessarily. EU member Governments are sovereign so can refuse to follow WTO rules. There is no mechanism whereby the WTO can force the EU to do anything AFAIAA, just one where the UK could retaliate.

beecher2

I did notice coffee and some fruit has gone up by quite a bit since BREXIT, I suspect it'll be used as an excuse by many supermarkets to put prices up.

Thrugelmir

Generali wrote: »

Not necessarily. EU member Governments are sovereign so can refuse to follow WTO rules. There is no mechanism whereby the WTO can force the EU to do anything AFAIAA, just one where the UK could retaliate.

Fortunately pragmatism rules at the end of the day. Trade is 2 way in some form.

CLAPTON

SunReader wrote: »

Or pay an even higher 'tariff' , import duty will remain, just we now have to spend years negotiating trade agreements on everything form Abacuses to Zoological supplies, with every single EU state...

Even if we get good terms the uncertainty and delays will kill a lot of business for us.

Imagine an EU country trying to fix a several hundred £ million trade deal with a British company for delivery in 5 year's time without even knowing what the future import duty will be?

I hope you didn't vote out in the hope of duty free import cars and 80% cheaper food. :beer:

think of a EU country trying to fix a several hundred £ million trade deal with a British compnay for delivery in 5 years without even knowing what the exchange rate might be or interest rates or inflation or which government will be in power or the state of EU banking sector or what Putin might be doing or whether China is in melt down or the price of oil.
How on earth is there any trade at all.

wotsthat

beecher2 wrote: »

I did notice coffee and some fruit has gone up by quite a bit since BREXIT, I suspect it'll be used as an excuse by many supermarkets to put prices up.

Supermarkets aren't charities. If their input prices increase they'll try and get the consumer to pay.

The market participants of Tesco, JS, Aldi etc. don't care because they care only about the prices differences between themselves rather than absolute prices.

For something like coffee where, apart from some hedging and forward buying to wash out, every supplier is facing the same increase so prices will increase across the board and quickly. The UK consumer will stump up the cash and moan about rip-off Britain rather than shop at the cheaper shop about 100m from where they usually shop.

Conrad

Price falls when we get out of the protection racket EU and trade freely

EU nationals will look on in envy