A magnetoelectric effect according to Katsura-Nagaosa-Balatsky mechanism in spin-1/2 XY chain in transverse magnetic field is considered. A spatial orientation of the electric field is chosen to provide an exact solution of the model in terms of free spinless fermions. The simplest model of quantum spin chain demonstrating a magnetoelectric effect, a zero temperature case of the spin-1/2 XX chain in a transverse magnetic field with Katsura-Nagaosa-Balatsky mechanism, is considered. The model has the simplest possible form of the magnetization, polarization and susceptibility functions, depending on electric and magnetic fields in a most simple form. For the case of arbitrary XY anisotropy, a non-monotonous dependence of magnetization on the XY anisotropy parameter is figured out. This non-uniform behaviour is governed by the critical point which is connected with the possibility to drive the system gapless or gapped by the electric field. Singularities of the magnetoelectric susceptibility at the critical value of system parameters are shown.