Farmers warn Ukraine war will hit UK food prices

Laurence Boone, the thinktank’s chief economist, said the UK was being hit by a combination of factors, including higher interest rates, higher taxes, reduced trade and more expensive energy. Balazs Orban, chief political aide to the prime minister, said Hungary sent a proposal to the EU over the weekend showing it was open to using the budget for the aid package if other "caveats" were added. Earlier today, a Russian official said air defences had thwarted a drone attack on the Slavneft-YANOS oil refinery in the city of Yaroslavl. "A frank and constructive dialogue is expected to improve relations between states," the Ukrainian president's office said on its official channel on the Telegram messaging app alongside a photo of Mr Szijjarto, Mr Kuleba and Mr Yermak.

• Those standing against Mr Putin in the upcoming election, including anti-war candidate Boris Nadezhdin, have until Wednesday to gather the required number of supporters' signatures to back their campaigns.









• 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.









• UK food prices will rise as a result of the war in Ukraine, the National Farmers' Union (NFU) has warned.









• That means extremely difficult choices for a Treasury gearing up for retrenchment and conscious that protecting military budgets means cuts would fall even more heavily on public services, themselves in desperate need of more investment.









• The NFU is asking the government to release an additional 10,000 visas under the Seasonal Workers Scheme, in addition to the 30,000 already granted.

A little earlier, we told you about a report in the Financial Times that the EU was proposing to sabotage Hungary's economy if Budapest blocks further aid for Ukraine this week. A spate of Ukraine-linked attacks on Russia's oil infrastructure have reportedly led Moscow's energy ministry to propose restricting flights over energy facilities. Moscow has claimed its forces have taken control of the village of Tabaivka in Ukraine's northeastern Kharkiv region. This could see states like Poland and the Baltics decide to aid Ukraine on their own, which "might leave NATO's eastern front vulnerable and cause a crisis within the EU and European NATO". However, he warned of "chaos" if European states do not show enough unity and determination.

How is the UK indirectly exposed to Russia through energy/commodity markets and global supply chains?

The war has strengthened political consensus that domestic renewables offer the cheapest and most secure form of energy. A year after Vladimir Putin launched his invasion of Ukraine, five IfG experts examine the impact of the war on the UK. I offer my condolences and that of the UK to all Ukrainians for the lives lost due to these barbaric airstrikes. These took place far away from the front lines of Russia’s war, in civilian populated areas. The intensity, regularity and indiscriminate nature of Russia’s attacks may violate international humanitarian law, is extremely concerning and must stop.

European countries have largely outsourced much of their military capacity and thinking on strategy and security to the States through NATO. 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. A senior European Union official has denied member states are discussing financial coercion to force Hungary to agree on financing for Ukraine. There is some suggestion that a renewed focus on the so-called Minsk agreements - which sought to end the conflict in eastern Ukraine - could be used as a basis to defuse the current crisis. Russia has been backing a bloody armed rebellion in Ukraine's eastern Donbas region since 2014.

'Orthodoxy' is not the issue: the Treasury’s outsized power creates problems for government

The Western defence official said that if Russia chose to carry out an attack now it could do so. But he said Russian forces massed on the border were still missing some crucial elements - such as full logistical support, ammunition stocks, field hospitals and blood banks. A senior Western intelligence official has warned that if Russia decides to invade Ukraine, a conflict could spill over further into Europe.

Boris Johnson, the former prime minister, revealed how he feared in Spring 2022 that Kyiv would come under pressure to accept a bad peace deal. But in a new BBC documentary to be aired on Monday, Ms Truss, the then foreign secretary, reveals that his efforts went down badly in Downing Street. "There is no prospect of food shortages at any point in the future, and Defra are working with Treasury to try and make sure that that continues to be the case," he said.

Whatever the medium- or long-term effects of the war it is likely that firms and households around the world, but also in the UK – fearful of the worst-case scenario – will delay investment and consumption decisions, holding back the wider pandemic recovery. BP Plc, Russia’s largest foreign investor, led the way on 27 February by announcing that it would exit its 20% stake in Rosneft, a state-controlled company. This could result in a $25bn write-off and a large reduction in its global fuel production.

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. "Given the current crisis in Ukraine the demand for food is ever increasing," he told the BBC. Dan Wallis, who runs Rookery Farms in Newbury, Berkshire, said he decided this week to sow spring wheat on land that was not due to be planted on until next autumn.

• Earlier this week, French President Emmanuel Macron said he thought a deal to avoid full-scale war in Ukraine was possible.









• The intelligence official described the build-up as a "slow drip" and a "slow ratcheting up of pressure".









• “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.









• Many analysts fear war in Ukraine could potentially spill over into other European countries.









• In response to the invasion, the geopolitical risk index developed by the US Federal Reserve spiked to the highest level since the start of the Iraq war in 2003.

As well as driving up costs for energy intensive companies, western sanctions on Russia could hit the availability of materials used in the aerospace, automotive and electronics industries. The country is a major producer of metals such as titanium, nickel, cobalt and lithium. The OECD is the second international body to cut its growth forecast in the past two days, with the World Bank warning in its global economic prospects of a return to 1970s-style stagflation – a combination of weak growth and high inflation.

So, as a net energy importer with a high dependence on gas and oil, higher global energy prices will still weigh heavily on the UK economy. But Russia is a major producer in global energy markets, accounting for 17 per cent of gas and 12 per cent of oil production globally in 2019 (Chart B, bottom-right panel). And both the UK’s domestic and foreign supplies of oil and gas are purchased at market prices which, as described elsewhere in this chapter, have risen sharply following the Russian invasion and international response. This would be amplified by falling UK consumer confidence,[25] which had weakened even before the invasion because of the cost of living crisis and impact of the Omicron variant.

• The OECD said the UK was expected to go from the second-fastest-growing economy in the G7 group of industrial nations after Canada this year to the slowest-growing in 2023.









• However, 76 per cent of the UK’s gross consumption comes from gas and oil compared with a European average of 57 per cent.









• “The recent shortages of components, such as microchips, could continue and expand into other areas as sanctions and export restrictions limit supply that feed into the wider supply chain,” Thornton added.

Unfortunately, the attacks on Tuesday morning were just the latest of a series of acts of wanton destruction by Russia in Ukraine since we last gathered for a Permanent Council in December. Over the Christmas period, Russia launched hundreds of missile and drone strikes across cities in Ukraine including Kyiv, Odesa, Kharkiv, Dnipro and Lviv. This culminated on 29 December, when Russian unleashed its largest aerial assault against Ukraine since the war began.