The Treasury said it had summoned supermarket representatives to a meeting in Downing Street on Thursday regarding food prices, and would “engage” with the industry on the impact on consumers. Rachel Reeves, the shadow chancellor, said the rate rise would add to the financial pressure on households: “The prime minister should take his fingers out of his ears and admit his personal responsibility for a Tory mortgage crisis leaving so many worse off.” With the Bank warning of a significant risk of inflation remaining persistently high, any further deterioration in the outlook could mean Rishi Sunak misses his target to halve the rate by the end of this year. We do see that food price inflation will start to slow.” “We are acutely aware of how difficult this rise in food prices is for people and especially for those people on lower incomes. “We have to stay the course to make sure inflation falls all the way back to the 2% target. “Let me be clear, inflation remains too high,” the Bank of England governor, Andrew Bailey, told a press conference after Thursday’s announcement. It adjusted the prediction because of high food prices, which are increasing at their fastest annual pace since 1977, and a resilient jobs market. The Bank now expects inflation at the end of the year to be above 5%, compared with its below-4% forecast in February. The rate has been stubbornly high in recent months, after falling by less than expected in March to stand at 10.1% – the highest in the G7 group of wealthy nations. Threadneedle Street said UK inflation was expected to stay higher for longer than previously forecast, with the measure of annual price rises on course to remain above the Bank’s target of 2% until after the next election. The central bank’s key base rate is now at its highest level since 2008, when the global economy was in the grip of the financial crisis. A graphic showing Bank of England interest rates over time
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