Households could face price increases of up to €1,360 a year as a result of a hard Brexit, an ESRI report has found. It estimates that cost increases for households could range between €892 and €1,360 a year, depending on post-Brexit trade arrangements between Ireland and the UK.
The ESRI looked at how different tariff and non-tariff costs would impact on family budgets. It found that an increase in non-tariff trade costs alone would cost families €892 a year. But increases in tariffs and other trade costs could push that as high as €1,360 or more.
The estimated price increases are the equivalent of between 2% and 3.1% in the consumer price index (CPI), our standard measure of inflation.
Some of the highest price increases would hit products like milk, cheese and eggs, with costs rising by as much as 40%. Cereals, bread, meat, sugar and tea are among other items that could increase by 20-30%.
And lowest earners would be hardest hit because low-income households spend relatively more on food and tend to buy more of the items subject to the biggest price increases.
The report also notes that significant attention has been payed to the potential ramifications of Brexit for Irish exporters, but not on the ramifications for prices on imported items. UK imports into Ireland made up 28% of total imports in 2016.
The report is available here and you can also find more information here and here.