Andrew Bailey Britain Russia Ukraine UPS Target COST Digital Andrew Bailey Britain Russia Ukraine

Bank of England says inflation has ‘turned corner’ despite soaring food prices

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The Bank of England governor has insisted that inflation has “turned the corner”, despite the UK being hit with the fastest annual growth in food prices since the 1970s amid the cost of living crisis.Andrew Bailey said annual inflation was on track to fall sharply in the face of a recent drop in wholesale energy prices, coupled with the prospect of last year’s jump in gas and electricity bills for British households dropping out of the annual figure.Speaking before the release of official inflation figures for April on Wednesday morning, Bailey told MPs on the Commons Treasury committee: “I do stand by the view that it has turned the corner.”City economists predict that the latest snapshot from the Office for National Statistics will show a fall in the annual rate to 8.2%, as measured on the consumer prices index, down from 10.1% in March.However, Bailey admitted that the central bank had “very big lessons to learn” after underestimating the impact of a series of shocks on the British economy including the Covid pandemic and Russia’s war in Ukraine.Inflation in the UK has remained stubbornly higher than anticipated over recent months, sticking in double digits at the highest level in the G7 group of advanced economies.

Critics have accused the central bank of being slow to react to steer inflation to its target of 2%.Harriet Baldwin, the chair of the Treasury committee, likened the Bank’s failure to spot inflationary pressures to City figures missing warnings before the 2008 financial crisis. “I think you could’ve made the same error as bankers and traders did running into the financial crash,” she said.Bailey admitted that the Bank underestimated the strength of Britain’s jobs market after the end of the furlough

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