What is it about?
This study looks at why food prices rise in European Union countries that do not use the euro. Using data from 2007 to 2023, we find that food prices are strongly affected by changes in exchange rates, especially when local currencies lose value against the US dollar, as well as by global shocks such as higher food and energy prices. By contrast, domestic monetary factors, such as liquidity or short-term interest rates, seem to play a much smaller role. The results suggest that food inflation in these countries is driven mainly by external pressures rather than by domestic demand, and that keeping exchange rates stable and food supply chains resilient is important for limiting future food price increases
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Why is it important?
This study is timely because food price inflation has become a major concern after COVID-19, the energy crisis, and the Russia–Ukraine war. It is also unique because it focuses specifically on EU countries outside the euro area, where national currencies and exchange rate movements still matter. Using a method that captures differences across countries and shared global shocks, the paper shows that food inflation is driven mainly by external pressures—especially currency depreciation against the US dollar and global price shocks—rather than by domestic monetary conditions alone. This matters because it helps policymakers and readers better understand why food prices remain vulnerable in small open economies and why exchange-rate stability and resilient food supply systems are so important.
Perspectives
What I find most important about this study is that it shows how strongly food prices in small open economies are shaped by forces outside national control. In public debate, inflation is often discussed mainly as a domestic monetary issue, but our results suggest that for non-euro EU countries, exchange-rate movements and global shocks can matter much more for food prices. I think this is especially relevant at a time when households across Europe remain sensitive to rising living costs. Personally, I hope this paper encourages a more realistic discussion of food inflation—one that pays greater attention to external vulnerability, exchange-rate stability, and the resilience of food supply systems.
Professor Imre Fertő
Eotvos Lorand Tudomanyegyetem
Read the Original
This page is a summary of: Monetary policy, exchange rates and food price dynamics: navigating heterogeneity in non-Eurozone countries, British Food Journal, April 2026, Emerald,
DOI: 10.1108/bfj-07-2025-0975.
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