Lazy eyes listen
The Bank of England’s chief economist, Huw Pill, has warned that rising inflation, which has been crushing the British economy, will slow, but food will stay more costly than before the cost-of-living crisis.
According to official data, food inflation in the world’s tenth-largest economy in terms of purchasing power parity (PPP) remained stubbornly high in the year to June, at 17.3%.
“Unfortunately, the days of seeing food prices fall appear to be something that we may not see for a little while yet, if at all,” Pill was quoted as saying on Monday by Sky News.
The impact on food costs in the UK has been “a little bit longer lasting than would have been expected,” according to the leading economist.
Pill noted supply chain insecurity for essentials such as wheat and sunflower oil as a result of the Ukraine war and Western sanctions against Russia, which has boosted the cost of raw materials and basic food.
British firms have responded by entering into costly contracts, according to Pill, adding that price increases will begin to slow when those contracts expire and food sub-processors in the UK adjust to the end of supply disruption.
Despite government efforts to reduce inflation, consumer price increases in the United Kingdom has been persistently high, with authorities and trade unions accusing supermarkets of “greedflation” and profiteering at the expense of consumers. Pill previously claimed that British people and businesses must accept that they are now poorer and should cease demanding salary hikes and raising prices.
“Some firms decided to sort of lock in their purchases of commodities in international markets in order to reduce that uncertainty, but potentially locked in at quite high levels of prices, and they’re still passing that through the system into what we’re ultimately paying for in shops,” he continued.