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Scotland will be hit harder by price rises caused by Brexit than almost any other part of the UK, an economic report has found.

Policy think tank IPPR considered the impact of both a soft and a hard Brexit on the price of the average “basket” of goods and services bought by households.

Under a hard Brexit, where the UK ends up trading with the EU on World Trade Organisation terms, Scots face paying 3.2 per cent more. The smallest rise – 2.7 per cent – is expected in London.

(Image: REUTERS)

Northern Ireland will be the only place worse off than Scotland.

Under a hard Brexit, transport costs could rise by a UK-wide average of 7.7 per cent, compared to four per cent rise if Britain remains closely aligned to the EU single market.

Food prices are expected to go up by 5.3 per cent under a hard Brexit and booze and tobacco by 7.2 per cent.

Russell Gunson, director of IPPR Scotland, said: “Our analysis shows that consumers in Scotland may be hit harder than most other parts of the UK over the coming years by price rises caused by Brexit.

“In Scotland, we tend to spend more than other parts of the UK on the food, drink and transport, which we can expect to rise in price by between three and more than seven per cent.

“We know that Brexit may make the challenges of Scotland’s ageing population more stark.

“This shows it may also hit families hard in the pocket, with price rises on the goods most often bought in Scotland.”

(Image: AFP)

The report comes as tensions in the Tory party boil over amid accusations that Brexiteer backbencher Jacob Rees-Mogg and his allies are plotting to oust Theresa May.

Speaking during her Westminster Hall debate on the implications for Scotland of leaving the EU, SNP MP Patricia Gibson said the Tory Government were “hopelessly divided”.

She added a lot of people are watching the unfolding of the Brexit process with “horror and alarm”.