Bank chief's warning over 'apocalyptic' food prices

The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia's invasion could have a disastrous impact on the world's poor.

- Larry Elliott

Defending Threadneedle Street before an announcement tomorrow of the sharpest annual increase in four decades, Andrew Bailey told MPs that while he was unhappy about the level of price rises, 80% of the inflation target overshoot was caused by factors outside the Bank's control.

Bailey said the Bank could not have been expected to predict a war in Ukraine, which he warned would have consequences for the UK and the developing world.

Countries such as Egypt and Tunisia rely heavily on exports of Ukraine's wheat and cooking oil, and the governor said his concerns about food supplies had been heightened after speaking to Kyiv's finance minister at last month's IMF meeting in Washington.

"He said he was optimistic about crop planting but at the moment there was no way of shipping the food out and it's getting worse," Bailey said. “That's not just a major worry for this country but a worry for the developing world. I'm sorry for being apocalyptic but it is a worry." Amid growing concern about Britain's cost of living crisis, the head of the CBI, Tony Danker, called on the chancellor, Rishi Sunak, to offer immediate help to those struggling to feed themselves as food and energy prices rise. The director general of the employers' organisation said there was a “moralimperative” on the government to act.