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  1. ITV Report

Bank of England's Mark Carney reassures consumers amid concerns of rising food prices

Bank of England Governor Mark Carney has reassured consumers faced with the prospect of rising food prices ahead of an expected 2.7% increase in inflation next year.

Speaking to ITV News, Mr Carney said the Bank plans to inject some stimulus into the economy so it can put the UK in the "best possible position" during Brexit negotiations.

"We're providing the same stimulus that we did in August to this economy, which means the cost of borrowing is very low and credit is available if you...want to buy a house," he said.

The Bank of England has left interest rates unchanged since August. Credit: ITV News

"In our judgement that's the right balance to support this economy," Mr Carney added.

In August, the Bank of England cut interest rates to 0.25%, and introduced a package of measures designed to provide additional monetary stimulus.

The Bank has continued to hold interest rates unchanged at 0.25%.

We face a choice - do we take monetary policy, do we tighten it, raise interest rates, crush that increase in prices and put a lot of people out of work, and lower the growth of wages or do we recognise the source of inflation, try to balance that off by keeping more people in work, providing some stimulus to the economy.

– Mark Carney
The cost of food shopping will rise as inflation rises.

Asked how high inflation would have to go for interest rates to be raised, Mr Carney said: "That's not boundless - there are limits to the extent to which we can support when inflation is going above and that's one of the things we signalled today - that there are limits."

Despite the warning of rising inflation, growth is likely to be better than expected, and is estimated to reach 1.4% in 2017 - higher than the 0.8% predicted.