Food prices could rise 10% under Brexit – Bank of England

Mark Carney, Bank of England Governor

Food prices could rise between five percent and 10 percent if there is a disorderly Brexit, the Bank of England governor, Mark Carney, has warned.

Mr. Carney told MPs that in the most “extreme” case, prices would rise by 10 percent, but in a less severe scenario the increase would be about six percent.

“In the most extreme scenario your shopping bill goes up 10 percent”. Mr. Carney said.

The Bank of England and its governor have attempted to assess the impact of Brexit on several occasions. All its assessments have seen it as a potential negative for the economy.

The price rises would come partly from a fall in the value of the pound, partly from any tariffs imposed and partly from increased costs at the border as imports are checked.

He and senior bank colleagues were challenged by MPs over what some critics have called scaremongering over Brexit.

The governor said they had put a lot of work into the Bank’s assessments sating “there’s no exam crisis”.

He explained a core team of 20 senior economists had worked on the assessments for a couple of years, 150 different professionals across the Bank were also drawn in and then the report was reviewed by both the Monetary Policy Committee and the Bank’s Financial Policy Committee.

Mr. Carney also said the UK’s ports were not ready for a no-deal Brexit that would see the country trade under World Trade Organization (WTO) rules, adding, the ports were not ready for a move to an administered WTO relationship.