How would a Brexit affect the cost of living in the UK?
The Brexit campaign is littered with statistics about the impact of a Brexit on the UK's economy. But how does this translate to its potential impact on the cost of living?
With the largest portion of our pay cheques invariably going on rent or mortgage payments, the impact of a Brexit on the housing market is likely to be acutely felt. George Osborne has suggested that a Brexit could cause house prices to fall by 10-18% by 2018, although ratings agency, Fitch, has suggested that the house price fall could be by as much as 25%. Although good news for prospective purchasers finding it easier to get onto the property ladder, this could leave existing homeowners heading towards a position of negative equity.
The cost of food
The UK is a net importer of food, importing 2.5 times more food from the EU than it does from the rest of the world; the EU is a much more important trading partner for the UK than the UK is a trade partner for the EU. The general consensus is that a Brexit would result in a weaker pound, with the Treasury estimating that leaving would lead to a 12% fall in the pound's value. A weaker pound would result in more expensive imports. Any new tariffs added to the cost of imported food would further increase prices, with the Prime Minister estimating that leaving the EU would increase the cost of food and drink by almost 3% (or £120 a year for the average family).
However, another view is that the price of food may decrease as the UK would no longer be subject to the EU's arguably "protectionist" policies. The EU's controversial common agricultural policy injects billions into the UK's farming industry, but has been criticised by some for inflating the price of food.
A Brexit could affect the wage we bring home, and our working environment. EU regulations impact the hours we work, our annual and parental leave, and anti-discrimination laws. Some of these regulations could be rolled back following a Brexit, although in practice these rights are likely to continue to be protected. Perhaps of greater significance is the effect on the free movement of EU workers. EU citizens' right to live and work in any of the member states would no longer be automatic, making it harder for businesses to recruit workers from the EU. Workers already employed in the EU may have to return to their country of origin. While migrant workers have contributed to economic growth and the income tax coffers, others argue that they have forced down wages for British workers. It is estimated that the jobs of three million people in the UK derive from trade with Europe, and it is uncertain how a Brexit would change the demand for these jobs.
On a final note…Reassuringly (to some), it has been confirmed that whichever way the UK votes on the 23 June 2016, due to its membership in the European Broadcasting Union it will still be eligible to enter the Eurovision Song Contest.