Anticipated impacts of Brexit scenarios on UK food prices and implications for policies on poverty and health: a structured expert judgement update

Martine J Barons and Willy Aspinall

Papers from arXiv.org

Abstract: Food insecurity is associated with increased risk for several health conditions and with increased national burden of chronic disease. Key determinants for household food insecurity are income and food costs. Forecasts show household disposable income for 2020 expected to fall and for 2021 to rise only slightly. Prices are forecast to rise. Thus, future increased food prices would be a significant driver of greater food insecurity. Structured expert judgement elicitation, a well-established method for quantifying uncertainty, using experts. In July 2020, each expert estimated the median, 5th percentile and 95th percentile quantiles of changes in price to April 2022 for ten food categories under three end-2020 settlement Brexit scenarios: A: full WTO terms; B: a moderately disruptive trade agreement (better than WTO); C: a minimally disruptive trade agreement. When combined in proportions for calculate Consumer Prices Index food basket costs, the median food price change under full WTO terms is expected to be +17.9% [90% credible interval:+5.2%, +35.1%]; with moderately disruptive trade agreement: +13.2% [+2.6%, +26.4%] and with a minimally disruptive trade agreement +9.3% [+0.8%, +21.9%]. The number of households experiencing food insecurity and its severity are likely to increase because of expected sizeable increases in median food prices in the months after Brexit, whereas low income group spending on food is unlikely to increase, and may be further eroded by other factors not considered here (e.g. COVID-19). Higher increases are more likely than lower rises and towards the upper limits, these would entail severe impacts. Research showing a low food budget leads to increasingly poor diet suggests that demand for health services in both the short and longer term is likely to increase due to the effects of food insecurity on the incidence and management of diet-sensitive conditions.

Date: 2020-10
New Economics Papers: this item is included in nep-agr and nep-int
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