Gah! You don't fix a food shortage with interest rates!
A third of the food price increases in the UK in 2023 was down to climate change, according to the Energy and Climate Intelligence Unit think-tank.
“There’s a material impact from climate change on global food prices,” says Frederic Neumann, chief Asia economist at HSBC. “It’s easy to shrug off individual events as being isolated, but we’ve just seen such a sequence of abnormal events and disruptions that, of course, add up to climate change impact.”
Such repeated events result in “a permanent impact on the ability to supply food,” argues Neumann. Food price rises once considered temporary are becoming a source of persistent inflationary pressure.
Globally, annual food inflation rates could rise by up to 3.2 percentage points per year within the next decade or so as a result of higher temperatures, according to a recent study by the European Central Bank and the Potsdam Institute for Climate Impact Research.