'Apocalyptic' Warning Over Food Prices

Bank of England Governor admits he is 'helpless' in fight against inflation

- Macer Hall

Britain faces “apocalyptic” food bill rises due to the war in Ukraine, the head of the Bank of England warned yesterday.

Andrew Bailey told MPs that inflation was out of the Bank's control when confronted by unforeseen events such as Vladimir Putin's invasion.

Governor Mr Bailey fears a further inflation surge is a “major worry” as the conflict disrupts supplies of wheat, cooking oil and other essentials from the region.

He urged high-earning UK employees not to demand bumper pay rises, to reduce the threat of a damaging wage-price spiral.

But £575,000-a-year Mr Bailey, below, admitted the bank's policy chiefs have felt "helpless” in the face of soaring price rises. He said: “It's a very, very difficult place for us to be in. This is a bad situation.” He delivered his grim forecast for the UK economy to the Commons Treasury Committee yesterday, adding that 80 per cent of the factors which are pushing up prices come from overseas.

The Ukraine war was the biggest driver of inflation, with export crops unable to leave the country due to the fighting.

Mr Bailey warned MPs: “Ukraine and Russia is the big risk in a way. One is the risk a of a further energy price shock, which would come from the cutting-off of gas and distillates, such as products like diesel.

“And then, the one which I might sound rather apocalyptic about is food.”

Mr Bailey added Ukraine's finance minister had said food supplies were stuck there: “While he was optimistic about crop planting, as a major supplier of wheat and cooking oil he said 'We have no way of shipping it out'.

“It is a major worry for this country and a major worry for the developing world.”