Yikes! Hard Brexit could cost Irish households over €1,300 a year
The cost of living for all Irish households could increase by 2 to 3.1 percent under a hard Brexit. The price of bread and cereals could jump by 30 percent, with milk, eggs, and cheese prices potentially rising by 46 percent thanks to possible tariffs and trade costs.
These numbers come from a study published by the Economic and Social Research Institute (ESRI) and commissioned by the Competition and Consumer Protection Commission.
The ERSI looked at different Brexit scenarios in order to determine how prices may increase for imported goods, the Irish Examiner reports.
Overall, there would be an increased cost of €892 to €1,360 annually per household, with the first figure showing what the increase would be like with non-tariff trade costs. The higher figure takes into account tariffs and other trade costs.
The higher costs incurred by a hard Brexit would disproportionately affect lower-income households. Poorer families could experience increases of 70 percent more than the wealthiest.
Poorer households would struggle more under a hard Brexit because they spend a higher proportion of their income on goods such as food that are greatly affected by tariffs and trade costs.
Martina Lawless (an ESRI associate research professor) and Edgar Morgenroth (professor of economics at Dublin City University), who authored the report, said that without a trade deal or transition agreement by March 2019, World Trade Organisation (WTO) tariff rules would apply.
This means that tariffs would be applied to UK goods being sent to the EU, and vice versa.
Martina noted that the projected numbers above reflect 'a worst case scenario'.
She said that the figures in the report likely show the maximum increase in the cost of living because they did not take into account that people may switch products or change their spending habits in the face of rising prices.