Many thanks for the introduction, Terry. It is a pleasure to be here this evening. Let me also add my thanks to you, Minette. You have been a strong and clear voice for British farming throughout your term as President of the National Farmers' Union. What a time it has been. Costs have been rising sharply. Trading arrangements and farm support have been changing. Summer droughts have been followed by winter floods. It is no small job to confront all of those challenges.
I would like to spend my time this evening talking about food price inflation.
To set the scene, I will start by showing a chart with the evolution of overall consumer price inflation over the past five years. Chart 1 shows how inflation (the white line) fell below the Bank's 2% target in the first year of the pandemic before it started to rise above the target in the second half of 2021, reaching a peak of 11.1% in October 2022. It shows how inflation has since come down significantly again, to 4.6% in the latest data for October published last week. In the shaded area, it shows how we expect it to remain around this level for the remainder of the year. In our forecast, it then continues to fall back towards the 2% target over next year.
Last week's data release was good news. It means that we are on track to bring inflation down to target. But it is too soon to declare victory. We still have a long way to go. Interest rates will have to stay high enough for long enough to make sure we get all the way back to the 2% target.
