Bank of England: food prices risk 10% rise in no-deal Brexit

By James Ridler contact

- Last updated on GMT

Carney warned that food prices could rise up to 10% in a worst case Brexit scenario
Carney warned that food prices could rise up to 10% in a worst case Brexit scenario
The price of food is at risk of rising between 5–10% if there is a disorderly Brexit, warned Bank of England governor Mark Carney.

Speaking to MPs on the treasury committee yesterday, Carney assessed the risks several Brexit scenarios would have on the cost of food in the UK.

In extreme cases, food prices would rise by 10%, reflecting a potential drop in the value of the pound (a 1.5% higher food price for each 5% drop), tariffs imposed and increased costs at the border as imports are checked. Carney stressed that these worst-case scenarios were highly unlikely.

“For individual food products that will vary, but what people will do is that, if the price of something goes up, they’ll switch products,” ​Carney added. This, in turn, would drive UK consumers to purchase more homegrown produce and turn away from potentially more expensive imported goods.

Not ready

Carney also warned that the UK was not ready to trade under World Trade Organisation (WTO) rules if there was to be a no-deal Brexit.

“At this point in time, the ports are not ready for a move to an administered WTO relationship,”​ said Carney.

“To be absolutely clear, our agents – my colleagues – have gone to these ports and had conversations directly with the ports in question. We have talked to the private logistics companies, so we have gathered direct information on this.”

Carney commented that if Government were to propose tariff-free trade with the EU, it would have to extend this offer to everyone looking to trade with the UK.

Free from discrimination

However, trading under WTO rules would mean that the UK would be free from discrimination in terms of tariffs set on its exports.

The move, should a ‘no-deal’ Brexit apply, could provide opportunities and protection for UK international trade, according to Edwini Kessie, WTO director of agriculture and commodities.

Meanwhile, the ability of food and drink firms to export food to the Continent has been revealed as environment secretary Michael Gove’s biggest fear​ should the UK leave the EU without a deal.

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2 comments

Carney should be nuetral,

Posted by Marcus Rose,

Carney's comments winds people up. He makes statements without explaining why and how he has come to his conclusions. He must think the British people are brainless. Most of BoE prophesies so far have been wrong, some have had to be revised. I believe there are 154 trading nations outside the EU. Are they all starving?

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Canadian scaremongering prick

Posted by Mike Lanagan,

What’s the basis for his prediction? Nothing at all.

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