Governor Andrew Bailey revealed how further food inflation was a 'major worry' for the central bank, with particular concerns about wheat and cooking oil.
He also 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 - and that surging inflation would hit household spending, causing unemployment to rise.
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 £570,000 a year as the top boss at Threadneedle Street, told MPs that high earners should 'think and reflect' before asking for large salary increases.
(...) Daily Mail
