Notes

Russia Ukraine war: how could it affect the UK economy?
“Uncertainty is deterring business investment and threatening to curb supply for years to come. At the same time, China’s zero-Covid policy continues to weigh on the global outlook, lowering domestic growth and disrupting global supply chains,” she added. Boone said the OECD had cut its global growth forecast for 2022 from 4.5% to 3%, while inflation in the organisation’s 38 wealthy-country members would average almost 9% – double the forecast in last December’s Economic Outlook.

"GDP bounced back from the hit it took in December due to the Omicron wave and is now 0.8% above its pre-pandemic peak," he said. Charles Michel, the president of the EU Council, added that Nato was “clearly embarrassed” by its inability to intervene in the conflict to help Ukraine. The Bank of England raised interest rates again in March to try and moderate rising prices. In the documentary, Ms Truss also admitted that the UK had not taken strong enough economic measures prior to the invasion to deter Putin. One risk is that leaks and arguments about the size of the army, military procurement and GDP percentages distract from a serious reckoning on what a new war in Europe means for the post-Cold War ‘peace dividend’ that has benefited us all.
He said the security situation in Europe was without precedent since the fall of the Iron Curtain. "Added to that are the recent border crisis involving thousands of migrants in Belarus, as well as Russia's backing of separatists in the Caucasus and elsewhere," he said. But the official noted there had been a combination of sharp bellicose rhetoric from Moscow, accusations of being provoked by Ukraine and Nato, a lack of transparency, and a worrying track record, including the annexation of Crimea in 2014. The war that erupted in eastern Ukraine in 2014 has already left 14,000 dead and an estimated 1.4 million displaced. "We could have a very large number of refugees, deaths could reasonably be expected to be high as would destruction within Ukraine," he said. Meanwhile, other Western defence sources have expressed concern about an increase in signals intelligence and "chatter" being monitored which could signal Russia's preparedness to invade.

UK government's humanitarian response to Russia’s invasion of Ukraine: facts and figures
Ukraine is known as the "breadbasket of Europe," responsible for a large proportion of the world's wheat. The COP talks are designed to give all countries an equal seat at the table, with anyone able to block progress, although these days few want to be perceived as great disruptors. Leaders including Prime Minister Boris Johnson and Ursula von der Leyen have both called for an accelerated roll-out of clean energy. The German government has brought forward its target for 100% renewable electricity by five years to 2035.

While much commentary is focused on Russia’s energy there are several other commodities whose supply could be substantially affected by the Russia–Ukraine war, from wheat to palladium. Phillips P OBrien, professor of strategic studies at the University of St Andrews, wrote in an analysis piece that the potential return of Donald Trump to the White House could see the US "neuter" the Western military alliance. We won't know for some time how badly Ukraine's landscape, nature and climate action will be impacted by the war. Paul Dales, chief UK economist at Capital Economics, said that while the economy had "rebounded with vigour" in January, "the cost of living crisis and the influence of the war in Ukraine probably means this is as good as it gets for the year".
After 2,000 anti-tank weapons were delivered last week and 30 British troops arrived to teach Ukrainian forces how to use them, the phrase "God Save the Queen" began trending on Twitter in Ukraine. Some bars and restaurants in Kyiv were offering free drinks to anyone who had a UK passport. But https://rentry.co/ynun7755 lives on as a challenge to all policymakers thinking about whether to engage diplomatically - and even militarily - in a potential conflict between two foreign countries. It's promising to deploy British forces to eastern European members of the Nato military alliance if Russian troops cross Ukraine's borders. After its botched start, Homes for Ukraine has been an effective model for accommodating large numbers of refugees (more than 110,000 as of January 2023) while defusing the political tension that characterises other asylum policy.

...and a potential migration crisis
We will continue to work with Ukraine and our international partners for a just and sustainable peace. According to reports, Russian missiles on Kyiv and Kharkiv killed at least 18 people and injured over one hundred. The devastation was felt most acutely in Kharkiv, where an apartment block was hit, killing two people, and injuring 35 residents.


"I think the whole world has got to recognise that this is not something we've faced before, we are going to see wheat price inflation levels that have never happened," she said. Last week, Boris Johnson, another former prime minister, argued that the re-election of Donald J. Trump to the White House would not be such a bad thing, so long as Mr. Trump comes around on helping Ukraine. “I simply cannot believe that Trump will ditch the Ukrainians,” Mr. Johnson wrote in a Daily Mail column that read like a personal appeal to the candidate. Britain’s economy is forecast to slow to a standstill next year as it suffers more than any other major industrial country from the effects of Russia’s invasion of Ukraine. The Russian president has intensified a crackdown on opposition since the start of his invasion of Ukraine, and this has ramped up further as the elections have approached. Prime Minister Viktor Orban has been highly critical of the EU's financial and military aid for Ukraine and has maintained close ties with Russia.

Invasion of Ukraine
Despite warnings from the US and its Nato allies that any invasion by Russia of Ukraine would have "severe economic consequences," Moscow's military build-up on the border continues. The latest data for January 2022 shows that the UK economy is now stronger than it was before the pandemic. Sanctions on Russia are already starting to worsen an acute cost of living crisis in the UK. Average household income is expected to fall a further £1,259 with larger price rises than expected until the end of 2025, according to new estimates. Labour's shadow chief secretary to the Treasury, Pat McFadden, said households were facing "a year of surging inflation, weak earnings growth and tax rises".


If, contrary to what is reflected in futures prices, energy prices stay at current levels beyond the middle of next year, the UK would face a larger and more persistent increase in the price level and fall in real household incomes. Permanently higher energy prices could deliver an adverse supply shock that reduced potential output in the medium term, which in turn would damage the structural fiscal position. In addition to capturing these impacts on the UK economy forecast, there is a smaller, though significant, impact on the fiscal forecast from lower UK equity prices, which have fallen in the wake of the Russian invasion. Our fiscal forecast captures the direct effect of lower equity prices on capital gains tax on the disposal of financial assets, though we do not assume any indirect wealth effect from lower equity prices on consumption and GDP.

If sanctions were to go further, for example by including Gazprombank (a key bank for Russian energy conglomerates) in the SWIFT ban, European countries may have difficulty paying Russian firms for gas, which could result in a reduction in supply. The economic consequences of the Ukraine invasion are pushing both inflation and growth in the wrong direction. At first glance, it appears that the UK will easily be able to weather the economic fallout from the war as neither Russia nor Ukraine are big trading partners. The French president carried on holding phone calls with Putin long after other Nato countries had cut ties with the Kremlin over its illegal war.
The predictions – contained in the OECD’s half-yearly economic outlook – represent a sharp downgrade from the estimated 4.7% growth this year and 2.1% next year made six months ago. Opposition leader Alexei Navalny, who has been serving prison time since 2021 after leading street protests and starting a nationwide opposition movement, was recently moved to a penal colony in Russia's far north. It's highly likely the election will see him start a new six-year term, which - if completed - would make him Russia's longest-serving ruler since the 18th century. Mr Zelenskyy has called for public officials to disclose their incomes to increase transparency and eliminate corruption as Ukraine tries to meet the stringent requirements for its bid to join the European Union. His incomings fell in 2022 as he earned less rental income from real estate he owned because of the outbreak of the war. Meanwhile, Indian thinktank Observer Research Foundation's Russia expert, Nandan Unnikrishnan, said India was unlikely to sign "any major military deal" with Russia because it would cross a red line with the US.

Opposition leader Alexei Navalny, who has been serving prison time since 2021 after leading street protests and starting a nationwide opposition movement, was recently moved to a penal colony in Russia's far north. The Western defence official said that if Russia chose to carry out an attack now it could do so. IfG's Mr Bartrum says that this uncertainty is likely to slow recovery from the pandemic. To that end the review already committed to exceeding NATO spending commitments, and the UK playing its part in multilateral governance and collective security in a more hard-nosed way. The fear is that if Russia is allowed to invade Ukraine unresisted, that might act as a signal to other leaders that the days of Western powers intervening in other conflicts are over.
Hungary previously said it would block further financial aid to Ukraine, but this morning suggested it was ready to compromise after the EU reportedly drew up plans to hit Budapest's economy. Hungary has signalled it is ready to compromise on EU funding for Ukraine - after Brussels reportedly prepared to sabotage its economy if it did not comply. Meanwhile, Moscow has claimed its forces have taken control of the village of Tabaivka in Ukraine's northeastern Kharkiv region. "I was clear about the tragic consequences that any invasion of Ukraine could have for all people - both Ukrainian, Russian and the security of Europe," Mr Wallace said of his meeting with the Russian defence minister. If Russia did decide to invade Ukraine, the senior Western intelligence official said large numbers of people would be displaced.


The bounce back in the economy in January was not just stronger than expected, it was also seen in buoyant tax revenues. The economy grew by 0.8% compared with a 0.2% contraction in December the Office for National Statistics said. The UK and our allies condemn the Russian government’s unprovoked and premeditated war against Ukraine. Egypt, China and Turkey import significant portions of these grains and are therefore particularly at risk.

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