Tuesday 17 May 2022 09:16 AM Brandon Lewis swipes at BoE chief over 'apocalyptic' food price warning trends now
Ministers today swiped at the Bank of England chief after he issued an extraordinary warning about 'apocalyptic' food price rises.
Northern Ireland Secretary Brandon Lewis said he was 'surprised' Andrew Bailey had chosen to use the stark language as he discussed the inflation threat with MPs yesterday.
Giving evidence to the Treasury Select Committee, Mr Bailey said food prices were a 'major worry' for the central bank, with particular concerns about wheat and cooking oil amid the Ukraine war.
He warned that a 'very real income shock' is coming this year as prices spiral at the fastest rate in 30 years and make millions of people poorer in real terms - admitting that the Bank is largely 'helpless' and unemployment will rise.
Asked in a round of interviews this morning about the warning of 'apocalyptic' pressures, Mr Lewis said: 'I was surprised to see that particular turn of phrase, I have to say.
'But the Bank of England is independent, they will have their view of their assessment, their economic view of where things are and where things are going.
'We do recognise ... and as a constituency MP I see the challenges that some of my constituents face, that we all face.'
He told BBC Breakfast: 'In my part of the world, we are all - the majority of people - on oil fire heating and you see that change in the price which has a big impact on people.
'That's why I think it is important as a Government we put in the packages of support we've put in and, as the Chancellor said, this is something we will keep under review because of the global pressures, as the Bank of England Governor said yesterday, that we're seeing on economies around the world.'
Mr Lewis said on Sky News that supermarkets typically hedged against food prices, suggesting that prices could be kept lower for some time as a result.
Northern Ireland Secretary Brandon Lewis (left) said he was 'surprised' Andrew Bailey (right) had chosen to use the stark language as he discussed the inflation threat with MPs yesterday
The Bank has now raised interest rates to 1 per cent and is predicting headline CPI inflation will top 10 per cent this year
Soaring prices for staples have already had a huge impact on food production around the globe and been a key driver of runaway prices squeezing household budgets.
But Mr Bailey described how the finance minister in Kyiv had told him of Ukraine's problems in shipping goods out of one of the world's largest food producing countries as Russia continues its assault on the country.
Ukraine is estimated to supply 10 per cent of the world's wheat and is also a major producer of sunflower oil.
'The main driver of inflation and what brings it down is the very big, real income shock which is coming from outside forces and, particularly, energy prices and global goods prices,' Mr Bailey told MPs.
'That will have an impact on domestic demand and it will dampen activity, and I'm afraid it looks like it will increase unemployment.'
Asked by MPs if he felt 'helpless' to do anything about inflation, Mr Bailey replied 'yes'.
Appearing before the House of Commons' Treasury Committee, Mr Bailey warned that problems linked to the Ukraine conflict were 'getting worse'.
In his exchanges with MPs, the Governor doubled down on his previous claim that workers should not be demanding big pay rises - despite the cost-of-living crisis - in an attempt to dampen rocketing inflation.
Mr Bailey, who earns
