Bank Governor pessimistic about food prices

Bank Governor pessimistic about food prices

The Governor of the Bank of England, Andrew Bailey, has warned of ‘apocalyptic’ global food price rises with runaway food and energy costs driven by global market forces.

Governor of the Bank of England, Andrew Bailey. Image Source: Bank of England.

Speaking at the Treasury Select Committee on Tuesday 16th May, Bailey also admitted that the Bank has little hope of bringing inflation back to its 2% target, with prices already climbing by 7% and a further surge expected in the coming months saying he is ‘helpless in the face of surging inflation, as the UK economy is battered by the Ukraine war.’

Mr Bailey told MPs sitting on the Select Committee that he is increasingly concerned about a further surge in food costs if Ukraine is unable to ship wheat and cooking oils from its warehouses. 

Prices are reported as rising at the fastest rate for 30 years. He added: “The risk I’m going to sound rather apocalyptic about, I guess, is food.” The Governor said that he had spoken to Ukraine’s finance minister and added: “Ukraine does have food in store but it can’t get it out at the moment.” He reported a conversation he had had with the Ukraine finance minister who reportedly said that ‘we have no way of shipping [food] out as things stand, and it is getting worse.’

Food prices in the UK and worldwide have already surged because of fears about the disruption caused by the Ukraine conflict. Wheat prices rose by up to 6% during Monday 15th May and along with other foodstuffs and ingredients remain under pressure.

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