Consumers reassured of no immediate change, but Brexit could mean higher prices

Updated

Consumers have been reassured that "nothing will change overnight" as a result of the Brexit vote, and even the fall in the value of the pound will take time to feed through.

Experts are agreed that keeping the cost of goods down for consumers and providing certainty for businesses must be at the heart of the Government's plans for life outside the EU.

British Retail Consortium chief executive Helen Dickinson said a prolonged fall in the value of the pound will affect import costs and ultimately consumer prices, "but this will take time to feed through".

Former chief executives of Tesco, Sainsbury's, Asda, Morrisons, Marks & Spencer and B&Q warned ahead of the referendum that a Brexit vote leading to a drop in the pound coupled with supply chain disruption would cause prices to spike, insisting that a UK exit would be "catastrophic for millions of ordinary families".

Their predictions came as consumers benefited from a ruthlessly competitive supermarket sector that has seen the Big Four - Tesco, Sainsbury's Asda and Morrisons - slash their prices to counter the threat of German discounters Aldi and Lidl, resulting in the price of groceries falling every month since September 2014.

The retail union Usdaw has predicted that the average household could be £580 a year worse off as a result of Brexit, based on an expected fall in sterling together with likely new tariffs imposed on imported EU goods including food, drink and clothing.

Richard Lloyd, former executive director of consumer group Which?, warned consumers ahead of the vote that leaving the EU will give ordinary British families a worse deal for years to come.

Laurence Olins, chairman of British Summer Fruits which represents 98% of the industry, said the board is "very concerned" about the effect of the result on home-grown crops.

He said the decision leaves a "serious question mark" over the future availability of sufficient numbers of seasonal workers - predominantly EU workers - to harvest the 100,000-tonne annual crop of berries between March and October.

He said: "The likely result is that berries will be imported, at high prices and environmental costs, both of which would be against the wishes of the UK consumer."

Some uncertainty also surrounds the full ban on mobile roaming charges within the EU due to take effect next year, with the suggestion that the UK would no longer necessarily be covered by the regulations.

The Government has said the loss of the safeguard of this legislation would result in a rise in bills but industry experts have suggested that operators would be unlikely to go back on the changes in a competitive market.

The BRC's Helen Dickinson said: "Now that a decision has been made to leave, it is important the Government moves quickly to explain the process of disengagement from the EU."

She added: "However, it is important for us all to remember that, even if the Government serves notice to leave the EU tomorrow, the process of leaving will take a couple of years, during which time the UK remains a member and EU rules over free movement will continue to apply.

"Retailers will continue to focus on serving and delivering for their customers day in, day out in a highly competitive market as they do today."

Which? stressed that "while we understand consumers will have questions about what this means for them, nothing will change overnight".

Which? chief executive Peter Vicary-Smith said: "The negotiations over the nature of our withdrawal from the EU will be a lengthy process and Which? is committed to working with the Government to ensure that the consumer voice is heard and important rights are protected."

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