The possibility of further food price increases is a “major, major worry” for the UK and other countries, according to the governor of the Bank of England.
Andrew Bailey, who apologised for sounding “apocalyptic,” said the Ukraine war was affecting food supplies.
Mr Bailey also defended the Bank’s performance after it was criticised for not doing enough to try to control rising prices.
Inflation, or the rate at which prices rise, has reached a 30-year high.
Mr Bailey warned that an increase in global goods prices would cause a “very big income shock,” reducing demand and increasing unemployment.
He also stated that difficulties in shipping food supplies from Ukraine could have an impact on global supplies of wheat and cooking oil.
“There’s a lot of uncertainty around this situation,” Mr Bailey said.
“And that is a major, major worry and it’s not just I have to tell you a major worry for this country. There’s a major worry for the developing world as well. And so if I had to sort of, sorry for being apocalyptic for a moment, but that is a major concern.”
Mr Bailey warned that price rises in food and energy would have a much bigger effect than any rise in interest rates.
With the government under intense pressure due to the cost of living crisis, there have been reports that some Cabinet ministers are dissatisfied with the Bank’s performance and question whether it should retain its independence.
Inflation reached 7% in March, and figures due out later this week are expected to show that the rate increased in April.
The Bank of England has warned that inflation could reach 10% by the autumn, well above its target of 2%.