A leading UK economist has predicted that food inflation will be a key factor, impacting on consumer markets for the foreseeable future.
Dr. Clive Black is head of research at Shore Capital Markets. He spoke at the recent Northern Ireland Food and Drink Association (NIFDA) conference in Belfast.
According to Black, both the UK government and the Bank of England should have foreseen the threat of inflation arising in the first place.
“But they didn’t,” he stressed. “The Bank of England is now using bank interest rate rises to tackle the problem. And this has an impact right across the economy
“The people being hit the hardest right now are young couples at the bottom of the mortgage ladder.”
Food inflation
Black went on to point out that the days of cheap food are over.
“UK consumers can’t have it every way. If they want high-quality food, produced from animals maintained under the highest possible welfare standards, then they will have to pay for it,” he continued,
“They will also have to pay for the investment required to lower the carbon footprint of the UK’s farming and food sectors.”
The economist indicated that consumers in Europe recognise the need to pay realistic prices for food.
A recent comparison of staple food prices in Germany and the UK has confirmed that German consumers are paying almost double that of their British counterparts.
Black castigated current government policy in the UK, which he said has allowed food self-sufficiency levels to fall dramatically and contributed to food inflation.
“Recent years have seen the Covid-19 pandemic and the war in Ukraine expose the weakness of having a food policy that is so reliant on imports,” he said.
“How many more warnings does the government need in this regard?”
Food security
Black believes that the days of food rationing could return if Britain’s extremely fragile food supply lines break down.
He proposed the appointment of a specific government minister to address the specific issue of food self sufficiency in the UK.
Northern Ireland Office Minister Steve Baker also addressed the NIFDA event.
He commented: “Northern Ireland has a proud history of producing high-quality food and drink, and I am delighted to see the sector go from strength to strength.
“This region is home to many innovative and dynamic companies, and the UK Government is committed to continuing to support the Northern Ireland food and drink industry’s success.
“We recognise the importance of this sector to the overall UK economy, and are working hard to ensure that businesses have the support they need to succeed.”