Consumers could face higher prices next year without a tariff-free trade deal with EU, warns British Retail Consortium

10 July 2020, 08:35 | Updated: 10 July 2020, 10:14

Consumers in the UK could face higher prices next year unless a tariff-free trade deal with the EU can be reached, the British Retail Consortium has warned.

The UK and EU remain locked in talks on a free trade deal but there are concerns an agreement will not be struck before the UK leaves its transition period at the end of the year.

The latest round of negotiations broke up early last week after both sides admitted they continue to disagree on a number of issues.

Around 80% of food imports come from the EU and the bloc plays a big role in supply chains for other items such as clothing and homeware.

In May, the government published its new tariff schedule to apply from the beginning of next year if a deal is not agreed.

It would see 85% of foods imported from the EU facing an average tariff of more than 20%, including 48% on beef mince and 16% on cucumbers.

Andrew Opie, the BRC's director of food and sustainability, said: "The next few months are critical to the living standards of millions of people in the UK. For decades, British households have enjoyed great value, quality, and choice, making it a great place to shop.

"However, without a tariff-free deal with the EU, the public will see higher prices in supermarkets from next year, squeezing millions of families already impacted by the current economic downturn. This is not the fair deal that consumers were promised.

"Many UK shoppers experienced disruption in the run up to lockdown; without a deal, the public may face an even bigger challenge at the end of the transition period.

"With the clock ticking down to 31 December, the government must put consumers first and agree a deal that avoids tariffs and minimises the impact of non-tariff barriers. This would prevent harm to shoppers, retailers and the wider economy."

The retail sector has already been damaged by the coronavirus pandemic - for months, non-essential shops were forced to remain closed in an effort to limit the spread of the virus.

Even after the reopening, many customers are still staying away.

Thousands of job losses have been announced in recent weeks, the latest being 5,300 jobs at Boots and John Lewis announced on Thursday.

Before the pandemic, retailers were struggling with high rents, businesses taxes, and online competition.