How Would a No Deal Brexit Affect UK Fuel Prices?
Aug 22 2019 Read 431 Times
Brexit is one of the most controversial topics of the decade and now Bank of England governor Mark Carney is fanning the flames with warnings that a 'No Deal' Brexit will raise petrol prices, as well as increase the cost of living and push down incomes. Carney claims the warning is "straight economics" and adds that "it may take a while to get to the sunlit uplands" promised by Theresa May and other Brexit advocates.
Bank of England governor cites tumbling pound as key driver
The comments are in reference to the falling value of the pound, which recently hit a two-and-a-half-year low. Carney maintains that an abrupt and reckless departure from the EU could sink the pound even further and as a result, affect the prices of everyday goods such as petrol and food.
In an interview with BBC Radio 4's Today programme, Carney said expecting prices to go up in the event of a No Deal Brexit is a reasonable prediction. He asserts failure to reach a deal with the EU would result in a drop in the exchange rate which would trigger price increases on imported goods like petrol, as well as fresh produce.
"The area of the economy where that instantly translates into prices is on the forecourt of the petrol station, and in fruit and veg," says Carney. "The challenge particularly in food is it's perishable, so you can't stockpile today for demand in November, and it is heavily dependent on ports being open."
RAC warns more increases could be on the horizon
Carney's new comments build on recent data from RAC revealing that in July it cost Brits an average of £71 to fill up the tank. The British automotive services company warns more increases could be on the horizon, with RAC fuel spokesman Simon Williams warning a No Deal Brexit "could easily lead to petrol going above the 2019 high of 130.67p seen at the start of June and diesel exceeding the year’s high point of 135.54p at the end of May."
While petrol prices are front of mind for most motorists, environmental concerns are also a major issue faced by the UK. For a closer look at how the British transport industry is addressing its environmental footprint, don't miss 'Lubricants and the Environment' which offers expert commentary from Dr. Raj Shah, Director at Koehler Instrument Company, NY.
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