A leading British economist has predicted that food inflation will be a key factor impacting consumer markets for the foreseeable future.
Dr. Clive Black is chief research officer at Shore Capital Markets. He was speaking at the recent conference of the Northern Ireland Food and Drink Association (NIFDA) in Belfast.
According to Black, both the British government and the Bank of England should have foreseen the threat of inflation in the first place.
“But they didn’t,” he stressed. “The Bank of England is now using the banks’ rate hikes to deal with the problem. And this affects the entire economy
“The people hardest hit right now are young couples at the bottom of the mortgage ladder.”
Black further pointed out that the days of cheap eats are over.
“British consumers can’t have everything. If they want high quality food, produced from animals raised to 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 reduce the environmental footprint of the UK’s agriculture and food sector.”
The economist indicated that consumers in Europe recognize the need to pay realistic prices for food.
A recent comparison of basic food prices in Germany and the UK has confirmed that German consumers pay nearly double their UK counterparts.
Black denounced current government policies in the UK, which he says have drastically reduced food self-sufficiency and contributed to food inflation.
“In recent years, the Covid-19 pandemic and the war in Ukraine have exposed the weakness of a food policy so dependent on imports,” he said.
“How many more warnings does the government need in this regard?”
Black believes 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 independence in the UK.
Northern Ireland 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’m delighted to see the industry going from strength to strength.
“This region is home to many innovative and dynamic businesses, and the UK Government is committed to continuing to support the success of Northern Ireland’s food and drink industry.
“We recognize the importance of this sector to the overall UK economy and are working hard to ensure businesses have the support they need to succeed.”