After the Russian invasion of Ukraine, the price of food has been increasing, and as per the chief economist at the Bank of England, these prices will never fall again.
The food inflation “could still remain higher than it was” before the Russians invaded Ukraine and the rate of food prices started to rise.
“Unfortunately the days of seeing food prices fall, that does seem to be something that we may not be seeing for a little while yet, if in the future at all”, the Bank of England’s chief economist, Huw Pill, stated.
In a Q&A, Mr. Pill said that regardless of the rate of food slowing down, the cost of food will remain high. The cost of food inflation is “going to take longer to dissipate.”
The overall consumer price index measure in the 12 months up to June was 7.9%, while that for food inflation was 17.3%, as per the official figures.
Rising food prices have greatly impacted the UK. According to Mr. Pill, “that impact on food prices in the UK has been a little bit more long-lasting than would have been expected on the back of past behavior.”
He responded by shifting the blame to the Russian invasion of Ukraine, which resulted in the disruption of the supply chain of staples that were grown in Ukraine. as the cost of raw materials increased, affecting wheat, sunflower oil, and basic food.
He continued, stating that in the wake of the invasion, price uncertainty hit the UK the hardest.
“Some firms decided to sort of lock in their purchases of commodities in international markets in order to reduce that uncertainty, but (they) potentially locked in at quite high levels of prices, and they’re still passing that through the system into what ultimately we’re paying for in shops,” he continued.
He further added that the rising prices are sure to slow down as those contracts expires, and food processors in the UK react to the end of supply disruptions.
- Published By Team Timeswire