The retail sector is likely to endure price rises of 20 per cent after Brexit, according to a new leaked government document seen by Sky News.
The government’s own analysis of the financial impact of Brexit states retailers will see an added cost after the UK departs from the EU, including a 16 per cent rise in food and drink costs.
This is due to non-tariff barriers which will come into place once the divorce is completed. These represent the new issues that will arise like extra customs checks, added paperwork, and diverging regulatory standards.
Economists prepared the report for cabinet ministers ahead of the today’s discussions on future trading relationships.
These staggering cost increases could have devastating effects on the industry, which is already struggling to come to terms with the rising costs brought on by the devaluation of the pound since the Brexit vote.
“This document does not represent Government policy and does not consider the outcome we are seeking in the negotiations,” a government spokesperson told Sky News.
“As ministers clearly set out in the House of Commons, this is provisional internal analysis, part of a broad ongoing programme of analysis, and further work is in progress.
“We are seeking an unprecedented, comprehensive and ambitious economic partnership – one that works for all parts of the UK. We are not expecting a no-deal scenario.”