The ongoing Russia-Ukraine conflict has had a significant influence on the world economy, and Bank of England Governor Andrew Bailey fears that if the war continues, global food prices would reach ‘apocalyptic’ levels. The interruption in the supply chain has resulted in global inflation, and Bailey warned MPs on the Treasury Select Committee of a ‘quite substantial income shock’.
‘I think the [danger] I’m going to sound very ominous about is eating. Ukraine has food, but it can’t get it out just now. While [the finance minister] was enthusiastic about crop planting’, he stated that as things stand, there is no means to ship it out, and the situation is deteriorating. That is a serious concern. It is a huge concern not only for this country, but for the entire developing globe. ‘ I am not a military strategist by any stretch of the imagination, but anything that can be done to assist Ukraine in getting its supplies out would be a major contribution,’ Bailey said, according to The Telegraph.
The International Monetary Fund (IMF) has already estimated that the conflict will reduce Europe’s growth rate by about half, and a large amount of food storage has been lost as a result of Russia’s blockade of Ukrainian supply ships, according to estimates.
Food prices are already rising owing to grain shortages in some regions of the world, and Bailey described the situation as ‘worse than unpleasant. It’s a very very, more than uncomfortable – I’m trying to think of a more severe term – it’s a very very tough place to be. To foresee 10% inflation and say there isn’t much we can do about 80% of it is an extraordinarily tough place to be. We must acknowledge the truth of the situation’, Bailey added.
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