Climate change is pushing up food prices — and worrying central banks

iIlluminem summarizes for you the essential news of the day. Read the full piece on the Financial Times or enjoy below:

🗞️ Driving the news: Climate change is driving up food prices and causing concerns for central banks. Shifting weather patterns are reducing crop yields and squeezing supplies, leading to sustained inflationary pressures

🔭 The context: Crop yields for staples like wheat, rice, soybeans, and coffee are declining due to rising temperatures and extreme weather events
• In 2023, a third of the UK's food price increases were attributed to climate change, and global annual food inflation could rise by up to 3.2 percentage points within the next decade

🌍 Why it matters for the planet: Persistent food price inflation due to climate change affects consumers worldwide, especially in developing countries where food constitutes a larger share of household expenditures
• This also impacts broader economic stability and living costs

⏭️ What's next: There is growing debate over whether central banks should adjust monetary policies in response to climate-induced food price shocks
• Potential measures include alternative inflation control tools, price controls, subsidies, and antitrust measures to prevent profiteering during inflationary periods

💬 One quote: "There’s a material impact from climate change on global food prices," says Frederic Neumann, chief Asia economist at HSBC

📈 One stat: Wheat yields are drastically reduced once spring temperatures exceed 27.8°C, with major wheat-growing regions experiencing such temperatures more frequently

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