The First Brexit Effects Come Home To Roost

For the first few weeks after the surprise result of the Brexit vote, the worst effects were limited to serious hand-wringing and anxiety over what would come next for the British Isles. In a sense, the former shouldn’t be of concern anymore — if only because the first aftershocks of the Brexit vote seems be coming ashore.

The Wall Street Journal is reporting that consumer goods manufacturers have begun to adjust their prices upward to compensate for significant gains foreign currencies have accumulated against the British pound since the vote. In particular, The WSJ noted that U.S. and Asian electronics producers have increased the costs of their goods to protect against the decline in sales.

In some cases, like on London’s Tottenham Court Road well-known for its consumer electronics shops, these price increases have topped out at 15 percent.

“Prices have definitely increased on all electronics,” Sohel Amin, manager of the Itbex UK Ltd. store, told WSJ.

Several companies have announced their imminent intentions to raise the price of British goods as well. Dell admitted that it would follow suit, as would HTC, which blamed “recent currency valuation changes” for a 10-percent price increase on its Vive virtual reality headset. In fact, the only major electronics brand that has not yet announced an intention to hike its U.K. prices is Apple.

The rise in consumer electronics costs has got experts wondering what the next market would be to do the same. Clothing and home products seem set for an increase, and companies in the energy sector have forecasted spikes of up to 6 percent in Q1 of next year.

In fact, the only industry that doesn’t seem to be preparing for price increases is the U.K.’s grocery market. That may only be temporary, though, as the cost of importing products from the continent continues to pile up.

“Historically one-third of the movement in currency has fed through to food inflation, although shorter term hedging has normally resulted in a 5 to 9 month delay in the effect feeding through,” Bernstein analyst Bruno Monteyne told WSJ.

Ironically, it looks as if prices across the U.K. will do anything but remain where they are.