Thanks Mhairi! I did some research after I read your comment. There is no extra tax on food imports from the EU by the UK. But there are border controls and these will potentially have a price effect. Good news is that Big Mac’s beef comes from the UK and Ireland. Nearly half of the fresh vegetables come mostly from the EU and frozen potatoes, such as chips, are 99 percent imported from the EU, from the Netherlands and Belgium. The UK imports 48% of its food.
The UK has a starker decline of the GDP than the Euro-area, -11.3% vs -7.8%. The forecasts should be taken with a pinch of salt as we’ll see how the pandemic progresses. UK’s GDP seems more volatile, in November a 5.5% rise for '21 was expected vs 4.2% in the Eurozone.
Both EU’s Big Mac price as well as UK’s are average prices. I checked Germany (4.56€) and Cyprus (3.60€). In London one costs 3.49 GBP although the recently published Index had 3.29 GBP as price. Big Mac’s were less expensive in the UK.
GB’s GDP has significant more reduction, the Pound will probably lose value against the Euro. As the main ingredient of the Big Mac, beef, is local McD’s might not have to raise the prices that much. But probably due to overall import inefficiencies will eventually have to.
3.76 GBP costs the Burger on average in the EUR-zone. Would prices rise to this level and the Pound lose value, and Euro prices stay flat, the result could be that the index stays the same?