The exposure of households' food spending to tariff changes and exchange rate movements

Document type
Briefing
Author(s)
Levell, Peter; O'Connell, Martin; Smith, Kate
Publisher
Institute for Fiscal Studies
Date of publication
27 July 2017
Series
IFS Briefing Note; BN213
Subject(s)
Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion
Collection
Social welfare
Material type
Reports

Download (1.2MB )

Brexit has the potential to have a substantial impact on the prices households pay for food. Currently around 30% of the value of food purchased by households in the UK is imported, and the major source of food imports is the EU. In comparison, only 17% of overall consumer spending is on imported goods. This means that changes in the costs of imports – for example, through changes to tariffs or movements in exchange rates – are likely to have a particularly big impact on food prices.

This briefing note discusses how changes in prices of imported food – for example, as a result of changes to tariffs and movements in exchange rates – might affect the prices that different households pay for their overall food baskets.

More from Social welfare collection

Related to Social Policy

Food: views on the food supply chain

This report explores how far factors relating to the food supply chain matter to people when buying food, and how far people trust the various actors and processes involved. It considers how

Can trade improve food security?

A paper discusses the effects of international trade on food security and finds these to be mainly positive. Firstly, trade increases food security by helping national economies to grow and increasing

Exchange rate uncertainty and deviations from purchasing power parity: evidence from the G7 area

This paper test the hypothesis advanced by Arghyrou, Gregoriou and Pourpourides (2009) that exchange rate uncertainty causes deviations from the law of one price, using aggregate data from the G7 area.

Dynamic news effects in high frequency Euro exchange rate returns and volatility

Investigation of the dynamic, short-run response of exchange rate returns to the information surprise of macroeconomic announcements reveals that US macroeconomic news generates far more dramatic responses

More items related to this subject