Andrew Bailey, the chief executive of the British central bank, warns of ‘apocalyptic’ consequences from the rise in food prices following the war in Ukraine, an important agricultural country.
–
Ukraine has sufficient supplies of its own, but cannot export them, Bailey said during a parliamentary committee. “That’s a big concern for this country, and a big concern for the developing world,” Bailey said.
In March, food prices in the UK rose by 5.9%. A further increase in prices is expected. Ukraine is a major producer of wheat and sunflower oil.
Wheat has never been so expensive. When the European markets closed, 438.25 euros per tonne had to be paid on Monday. The new record price follows India’s announcement to ban wheat exports. Due to the persistent heat, production has been limited and domestic prices have risen.
‘Very big wage shock’
Bailey warns that rising energy and food prices will also push inflation further, causing a “very large wage shock.” Unemployment would eventually rise again. Millions of Britons could end up in poverty as a result.
When asked if Bailey feels helpless to do anything about rising inflation, he answered simply ‘yes’.
–
