28th October 2016
Coffee drinkers will soon have to pay more for their flat white or latte as the impact of the EU referendum pushes up the cost of imported goods, experts have warned. Like many other goods that are imported to the UK, coffee beans are bought and sold using the US dollar. As the pound plummets in value – dropping 15pc against the dollar since the vote – wholesalers are already seeing the impact of higher prices.
Richard Champion, deputy chief investment officer at Canaccord Genuity Wealth Management, said: “We don’t expect sterling to recover anytime in the near future so we’d expect this to wash through into higher prices. “It’s another clear example of what we’re going to see happening in the coming months as higher import costs filter through.”
Domestic food prices have been falling for some time. Yesterday, the British Retail Consortium (BRC) said that food prices fell by 0.8pc between May and June, their biggest decline for more than a year. The data reflects the period up to 10 June, just ahead of the EU referendum. Despite this, the falling value of sterling is still expected to contribute to a rise in the price of goods in the UK. Imported food accounts for 60pc of all food that is bought in the UK.
Before the vote, the Union of Shop, Distributive and Allied Workers (USDAW) warned that a drop in the pound coupled with supply chain disruption would cause the price of food, drink and clothing to spike. It estimated the average household could be £580 a year worse off as a result. Mr Hurst adds: “I don’t think that many people realised [before the EU referendum] that lots of products we import to the UK are traded in dollars. “I think people will be shocked that their vote now means they will pay more.”
For the full story visit https://www.telegraph.co.uk/money/consumer-affairs/why-brexit-is-already-pushing-up-the-cost-of-a-cup-of-coffee/