Brexit boost for consumers short-lived says IFS

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Consumers could see prices fall by up to 1.2% if Britain were to abolish all tariffs once it has left the European Union, a report says.

But the study by the Institute for Fiscal Studies warns that any gains would be small and were based on "optimistic" assumptions.

It also said that consumers had already seen prices rise by 2% since the referendum due to the weaker pound.

Costs linked to new EU trade barriers could also hit consumers, it said.

Those increased costs would "offset" any "rather limited" gains from becoming tariff free in the future, the report from the think tank says.

"We estimate that complete abolition of all tariffs would reduce prices faced by households by about 0.7-1.2%," the report says.

"This could have additional positive economic benefits in the long run but could also be very damaging for some UK industries in the short run."

Abandoning tariffs
Tariffs - taxes on imports - are often used to protect parts of a country's economy such as farming and car manufacturing.

Abandoning tariffs would mean greater competition for those sectors from abroad which could mean job losses, for example.

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