The Ukraine war has had an impact on food prices worldwide. In Great Britain they have already risen by 5.9 percent in March. And the Bank of England boss has a bleak prognosis.
In view of the Russian war against the important agricultural country Ukraine, the British central bank head Andrew Bailey has warned of “apocalyptic” price increases for food. Ukraine has sufficient stocks but cannot export the goods, Bailey told a parliamentary committee in London. “It is a major concern for this country and a major concern for developing countries,” the Bank of England governor said on Tuesday, according to British media. “Sorry to be apocalyptic, but that’s a big problem.”
In March, food prices in Great Britain had already risen by 5.9 percent. The increase is expected to increase further. Ukraine is important primarily as an exporter of wheat and a producer of sunflower oil.
Food and energy prices could plunge millions into poverty
Bailey warned that rising energy and food prices would fuel inflation while triggering a “very large shock in real wages”. Ultimately, unemployment will rise again. Inflation had recently climbed to 7 percent in Great Britain, and the Bank of England expects consumer prices to rise by up to 10.25 percent this year. According to experts, millions of people in the country could slide into poverty and debt because of rising prices, especially for food and energy.
The central bank could not have done otherwise, Bailey assured. “We can’t predict things like wars, it’s in nobody’s power.” When asked if he felt helpless to do anything about rising inflation, Bailey said, “Yes.” The Fed governor urged workers — particularly those on higher incomes — to “think and reflect” before demanding wage increases and fueling inflation further.