Supermarket bosses have been summoned to the Treasury to explain surging food prices

Treasury officials have called supermarket executives to discuss the escalating food prices, following a warning from the Bank of England that these costs would continue to rise throughout the year.

Shortly after Bank governor, Andrew Bailey, escalated interest rates to a 15-year peak, citing a “significant underlying shock” in food prices, leaders from some of the UK’s largest grocery chains were requested to provide an explanation for the swift price inflation in Westminster.

The Bank of England has now increased interest rates for the twelfth time in a row, moving from 4.25pc to 4.5pc. This shift marks the highest borrowing costs seen since 2008.

A meeting between government officials and major supermarket representatives regarding escalating food prices is in progress.

Scheduled for an hour this afternoon, the virtual meeting will likely address the factors contributing to market inflation and potential strategies to decrease food prices. It’s believed that John Glen, the chief secretary to the Treasury, is chairing the meeting.

The Liberal Democrats have accused supermarkets of profiteering and neglecting to lower prices in line with decreasing wholesale costs. Despite expectations from the Office for National Statistics that global food price drops would be mirrored in supermarket pricing, this is yet to be observed.

The Bank of England attributed the recent inflation almost entirely to the surge in food and goods prices, a trend they foresee continuing.

In its most recent economic forecast, the Monetary Policy Committee (MPC) noted: “The decline in food price inflation is likely to occur at a slower pace than previously anticipated.”

It added that the current short-term forecast for UK food inflation doesn’t anticipate any reduction in average food prices, but rather a deceleration in the rate of inflation.

The Bank of England’s 12th consecutive decision to increase interest rates will adversely affect businesses, mortgage holders, and renters, as per trade union Unite.

Sharon Graham, Unite’s General Secretary, stated:

With each increase in interest rates, banks enjoy windfall profits, now reaching billions. However, businesses, mortgage holders, and renters bear the burden. This remedy is proving detrimental to those it should help.

The Bank of England continues to lag in its response. Whether it involves requesting a national wage reduction or persistently raising interest rates, the Bank of England seems out of touch with reality.

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