market news

Britain faces major apocalyptic food crisis set off by the Ukraine war

Date: May 18, 2022 Meghna Singh Meghna Singh
Britain faces major apocalyptic food crisis set off by the Ukraine war 
Andrew Bailey, the governor of the Bank of England, has reportedly warned UK MPs that the ‘apocalyptic’ global food price spikes prompted by Russia's invasion of Ukraine are a serious concern for the UK.



The governor warned that households will face a significant income blow and acknowledged feeling helpless in the face of rising inflation.



Bailey's remarks came as former Tory MP, Michael Fabricant, urged chancellor Rishi Sunak to increase benefits in accordance with inflation, and as concerns were expressed over Ofgem’s intention to review the price cap on household bills four times a year rather than the standard two times.



Bailey supported the Bank's monetary policy, warning that if Ukraine, a key agricultural exporter, is still unable to export cooking oil and wheat from its warehouses due to a Russian invasion, food prices could rise even more.



Bailey further stated that the United Kingdom is already in a poor situation with regards to inflation. He argued that the cost of living has been forced up by a slew of global factors that the bank's rate-setters could never have predicted.



The crisis in Ukraine and China's recent response to a surge of Covid infections in the nation, which included strict, economically devastating lockdowns, are two examples. As a result, global energy costs have risen sharply and unexpectedly, causing the cost of living in Britain to jump high.



Inflation, or the rate at which prices rise in the economy, is presently at 7%, with the Bank of England predicting that it will hit 10% this year. This is in contrast to the Bank's 2% target, which is crucial to a key aspect of its mandate known as price stability.



Still, as signs of waning consumer confidence surface, the Bank may be forced to choose between controlling inflation and avoiding a recession. This is because higher interest rates can serve as a damper on economic growth.



The Bank of England cautioned earlier this month that the significant compression in household living standards would almost certainly lead to a rapid economic recession.



Source credit: https://www.independent.co.uk/news/business/news/inflation-cost-of-living-interest-rates-b2080117.html

About the author

View All Posts

Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.