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EU Referendum: Northern Ireland household budgets likely to be hit by rise in food prices and higher taxation

By Paul Gosling

Published 25/06/2016

Warning: George Osborne
Warning: George Osborne

Northern Ireland households will feel some gains as well as losses as the immediate impact of the Brexit vote is felt.

First, the good news.

Interest rates will remain low as the Bank of England tries to stave off the potential economic damage from Brexit.

Similarly, it seems likely that house prices will fall along with demand - which is positive news for those struggling to buy their first home, but not so good for sellers.

In terms of the weekly shop, if sterling stays weak against other currencies, imports will become more expensive. That could lead to slight increases in the cost of food and noticeable rises in the price of imported manufactured items - ranging from electrical items to cars.

Petrol and heating oil are also likely to rise, but the big fear is regarding taxation.

The Leave campaign attacked the cost of the UK's contributions to the EU budget - £17bn a year gross, or £8bn a year net.

However, the London School of Economics expects the economy to be smaller by between 6.3% and 9.5% than if we stayed a member of the EU.

Chancellor George Osborne suggested this would cut about £30bn from the Government's tax revenues. Even allowing for exaggeration, the vote is likely to lead to higher taxes and a new round of austerity cuts.

Paul Gosling is a journalist specialising in personal finance and the economy

Belfast Telegraph

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