A potent cocktail of post-pandemic spending mixed with a sluggish supply chain has boosted inflation rates across the globe—and the United Kingdom’s complicated exit from the European Union has further muddled Britain’s economic recovery. The result has meant rising prices on everything from used cars to clothing, at a time when the British relaxed many of their COVID-19 restrictions mid-summer. “COVID and Brexit have interacted in a way that has made things far more difficult here in the U.K.,” says Yaprak Tavman, associate professor of economics at NCH at Northeastern in London.
Consumers in the United States are also grappling with rising inflation, but Brexit has added a layer of bureaucratic red tape for both imported goods and workers. Though the United Kingdom voted to separate from the European Union in 2016, full separation didn’t go into effect until January as the pandemic still had a stranglehold on supply chains around the world. “Brexit increased costs in the U.K. in terms of imports and in supply disruptions,” says Tavman. Some European natives who went home to live with family during the pandemic haven’t been able to return to their U.K. jobs without a visa, further impacting the U.K.’s labor shortage.
“Brexit and COVID-19 just happened to coincide and overlap. Brexit on its own would cause a disruption in supply chains, because there used to be free movement of goods, services and people between the EU and the U.K.,” says Robert Triest, professor of economics.