Difference between revisions of "The UK governments response to the Russian invasion of Ukraine"

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<p>US officials have also pointed to an increase in Russia's social media "disinformation". The intelligence official described the build-up as a "slow drip" and a "slow ratcheting up of pressure". Gemma Tetlow, chief economist at IfG, says that there are potential opportunities for UK producers in markets like barley, wheat and gas. IfG's Mr Bartrum says that this uncertainty is likely to slow recovery from the pandemic. The EU imports more than a third of its nickel from Russia, 28% of fertilisers and 27% of its mineral fuels.</p><br /><br /><ul><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>But when asked about the state of UK-Russia relations, Mr Wallace said they were "a lot better than 0%" after Friday's talks.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>Trade between the two is small relative to the size of either economy and Russia is not closely integrated in the global financial system.</li><br /><br /> <br /><br /> <br /><br />  <br /><br /> <li>As prime minister Boris Johnson promised to increase defence spending from an existing 2% to 2.5% of GDP; his successor Liz Truss went further by committing to 3%.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>Nato powers are already promising to build up their own forces in the alliance's eastern flank.</li><br /><br /> <br /><br /> <br /><br /> <br /><br /> <li>Another risk is that Sunak’s can-kicking over budgets postpones the serious investment needed in military supplies.</li><br /><br />  <br /><br /> <br /><br /> <br /><br /></ul><br /><br /><p>Analysts had hoped the cost-of-living squeeze would fade as pandemic restrictions are removed, although now warn the Russian invasion and western sanctions will add to inflationary pressures. Even sectors without direct trade links will be hit by supply chain disruption and rising prices if they depend heavily on Russian and Ukrainian production of inputs. UK manufacturers are facing a sharp rise in costs as the Russian invasion of Ukraine undermines the progress made towards fixing global supply chains before the conflict broke out, economists have warned.</p><br /><br /><h2>UK government's humanitarian response to Russia’s invasion of Ukraine: facts and figures</h2><br /><br /><p>This is most likely to affect the two major pipelines that cross Ukraine to bring Russian gas to Europe.[17] An event such as this would imply localised disruption to the flow of Russian gas via Ukraine. In the most disruptive scenario Russia could turn off its supply of natural gas to Europe. If war broke out in Ukraine and Russian forces occupied large swathes of the country, many civilians might flee. But both of these demands would break key Nato principles, namely that the alliance should be open to any European country that wants to join and that all Nato members should be sovereign nations.</p><br /><br /><br /><br /><p>Ms Batters said the shortage of crops would also affect meat production as farmers need it to feed their livestock. "The real danger is that farmers contract, they decide not to invest, they hold back from planting, and we produce less food," she said. The manufacturing trade body Make UK said about 3,800 firms exported goods to Russia while 1,200 brought in materials, despite only accounting for 0.8% of total UK goods exports and 2.1% of imports. “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.</p><br /><br /><h3>Russia-Ukraine War</h3><br /><br /><p>While the official said it was hard to say these were all strategically related, it showed that there was an issue on Eastern Europe's eastern flank. But the official said Russia could also initiate actions against Nato members such as cyber and hybrid warfare, and even physical attacks. "But the extent to which that is possible is impacted by uncertainty because it requires significant long-term investment and that won't be worth doing if this is purely a temporary blip," she says. But despite limited [https://pastelink.net/m4uj5073 https://pastelink.net/m4uj5073] , some parts of the UK economy are quite reliant on Russia.</p><br /><br /><br /><br /><p>If gas and electricity prices stay at the current levels, the Resolution Foundation predicts that the energy price cap next winter will be almost £1,000 higher than the elevated level set to be introduced in April (£1,971). "We are all going to suffer, but it will hit poorer people more than the average person as they spend proportionately more on heating and food." Mr Sunak said that Russia's invasion "is creating significant economic uncertainty", but "it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails". Computer programming and film and TV production also had a good start to the year, said Darren Morgan, ONS director of economic statistics.</p><br /><br /><h3>Invasion of Ukraine</h3><br /><br /><p>The impact of the Russian invasion of Ukraine on our forecast for the UK economy comes primarily via the impact of higher energy prices on inflation, real incomes, consumption and imports. Higher oil prices feed into the fuel component of CPI prices directly, while the household utility component is adjusted for expected changes in wholesale gas and electricity prices every six months via the Ofgem price gap. We assume that wages do not rise to compensate for this bout of higher inflation which is driven by external forces. We already expected firms’ profit margins to be squeezed by other cost increases that were expected before the invasion. The UK does not have significant direct trade links with either Russia or Ukraine, so our economy’s most direct exposure to Russia’s invasion of Ukraine is via its impact on the global price of energy. The UK’s total energy demand fell by 22 per cent between 2000 and 2019, reflecting both a shift away from more energy-intensive industries and improvements in economy-wide energy efficiency.</p><br /><br /><br /><br /><br /><br /><p>Mr Lavrov said he was disappointed with the talks, accusing Ms Truss of not listening to Russia's concerns and describing their conversation as "a dialogue between a deaf person and someone who was mute". But when asked about the state of UK-Russia relations, Mr Wallace said they were "a lot better than 0%" after Friday's talks. Mr Shogiu said the counter-proposals submitted by Nato and the US had now been reviewed and promised "our response will follow shortly". Western countries have rejected this and instead put forward other suggestions, such as cutting back nuclear weaponry. Security concerns have grown in recent days after Russia started huge military drills with neighbouring Belarus and was accused of blocking Ukraine's access to the sea. Russia wants assurances that Ukraine will never be allowed to join Nato; that Nato members will have no permanent forces or infrastructure based in Ukraine; and for a halt to military exercises near Russia's border.</p><br /><br /><ul><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>In line with the spirit of that pre-Russian invasion period, the original document was titled “Global Britain in a competitive age”.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>By restricting Russia’s access to much of its $600–700bn in foreign exchange reserves, this move significantly limits the central bank’s ability to stabilise the rouble as it had done in response to the initial sanctions.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>I offer my condolences and that of the UK to all Ukrainians for the lives lost due to these barbaric airstrikes.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>There is also expected to be a considerable jump in the prices we pay at the supermarket and petrol pump.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>Ukraine is the world’s second biggest exporter of grains and Russia often tops the ranking for wheat exports.</li><br /><br />  <br /><br /> <br /><br /> <br /><br /></ul><br /><br /><p>The union has written to the government to call for urgent action to help UK farmers produce enough food to keep supermarkets stocked and affordable. In addition, the price of gas - which is used to heat greenhouses and to make fertiliser - has soared. Some 30% of the world's wheat comes from Ukraine and Russia and exports will stop during the conflict, it says.</p><br /><br /><ul><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>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.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>The government's independent advisory Climate Change Committee recently warned that any new North Sea projects will take an average of 28 years to start producing oil and gas.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>Mr Sunak said that Russia's invasion "is creating significant economic uncertainty", but "it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails".</li><br /><br /> <br /><br /> <br /><br />  <br /><br /> <li>This brings the United Kingdom’s total package of support to Ukraine to approximately £12 billion.</li><br /><br /> <br /><br /> <br /><br /> <br /><br /></ul>
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<p>A little earlier, we told you about a&nbsp;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. [https://pastelink.net/jknlskmf https://pastelink.net/jknlskmf] 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.</p><br /><br /><br /><br /><p>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.</p><br /><br /><h2>Unprecedented sanctions will hurt Russia – but may not change Putin’s approach</h2><br /><br /><p>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.</p><br /><br /><br /><br /><br /><br /><p>Mr Johnson said the invasion of Ukraine should “mark the end” of the West’s soft approach towards Putin who he said needed to be “put back in the box”. The former prime minister said that the military alliance’s dithering over whether Kyiv would be allowed to join had been a “fatal” error. “We realised the weapons and the sanctions were the real levers that we had over Russia but we were behind the curve in terms of our sanctions,” she said. Another factor affecting food production in the UK is that Ukrainian workers have accounted for 60% of recruits under the UK's Seasonal Workers Scheme, the NFU said.</p><br /><br /><h3>Foreign Office resource has been redirected to deal with the crisis</h3><br /><br /><p>We remain deeply humbled by the bravery and the resilience of the Ukrainian people and their determination to win. The Federation of Wholesale Distributors has also warned that the increase in fuel prices will lead to people paying more for food in shops and restaurants. Its letter warned that disruption to food production, supply chains and the availability and affordability of food in the shops could last for years. The conflict in Ukraine pushed the price of oil to its highest level for nearly 14 years at one point and this has had a knock-on impact on fuel costs, with UK petrol prices hitting record highs. But because the UK operates in international gas markets, prices will be hit by any drop in global supply. Earlier this week, the boss of one of the world's biggest fertiliser companies, Yara International, warned that the war in Ukraine would deliver a shock to the global supply and cost of food.</p><br /><br /><br /><br /><p>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.</p><br /><br /><h3>Our people</h3><br /><br /><p>Olly Bartrum, a senior economist at the Institute for Government (IfG), says that disruption to global metal markets will affect many key UK sectors like automotive, smartphones and aerospace. Despite limited dependence on Russian imports, surging global prices are expected to erode living standards even further. 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". He added that the government had "provided unprecedented support" throughout the Covid pandemic, "which has put our economy in a strong position to deal with current cost of living challenges". Gas prices have also soared, leading to warnings that average energy bills could reach £3,000 per year in October, after rising to £2,000 in April when the energy price cap is raised.</p><br /><br /><ul><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>With war raging in Ukraine, many fear ministers will be distracted from climate action.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>However, any disruption to the supply of energy to Europe will affect wholesale prices in the UK to a greater extent than implied by direct trade links.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>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".</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>But we now see more clearly that, in a crisis, for the foreseeable future UK interests are aligned with the US and Europe, especially if China aligns itself more with Russia.</li><br /><br />  <br /><br />  <br /><br />  <br /><br /> <li>The government is likely to face further pressure on its tentative support for onshore wind and solar.</li><br /><br />  <br /><br /> <br /><br /> <br /><br /></ul><br /><br /><p>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.</p><br /><br /><br /><br /><p>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.</p><br /><br /><br /><br />

Revision as of 11:31, 2 February 2024

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. https://pastelink.net/jknlskmf 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.





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.



Unprecedented sanctions will hurt Russia – but may not change Putin’s approach



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.







Mr Johnson said the invasion of Ukraine should “mark the end” of the West’s soft approach towards Putin who he said needed to be “put back in the box”. The former prime minister said that the military alliance’s dithering over whether Kyiv would be allowed to join had been a “fatal” error. “We realised the weapons and the sanctions were the real levers that we had over Russia but we were behind the curve in terms of our sanctions,” she said. Another factor affecting food production in the UK is that Ukrainian workers have accounted for 60% of recruits under the UK's Seasonal Workers Scheme, the NFU said.



Foreign Office resource has been redirected to deal with the crisis



We remain deeply humbled by the bravery and the resilience of the Ukrainian people and their determination to win. The Federation of Wholesale Distributors has also warned that the increase in fuel prices will lead to people paying more for food in shops and restaurants. Its letter warned that disruption to food production, supply chains and the availability and affordability of food in the shops could last for years. The conflict in Ukraine pushed the price of oil to its highest level for nearly 14 years at one point and this has had a knock-on impact on fuel costs, with UK petrol prices hitting record highs. But because the UK operates in international gas markets, prices will be hit by any drop in global supply. Earlier this week, the boss of one of the world's biggest fertiliser companies, Yara International, warned that the war in Ukraine would deliver a shock to the global supply and cost of food.





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.



Our people



Olly Bartrum, a senior economist at the Institute for Government (IfG), says that disruption to global metal markets will affect many key UK sectors like automotive, smartphones and aerospace. Despite limited dependence on Russian imports, surging global prices are expected to erode living standards even further. 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". He added that the government had "provided unprecedented support" throughout the Covid pandemic, "which has put our economy in a strong position to deal with current cost of living challenges". Gas prices have also soared, leading to warnings that average energy bills could reach £3,000 per year in October, after rising to £2,000 in April when the energy price cap is raised.











  • With war raging in Ukraine, many fear ministers will be distracted from climate action.








  • However, any disruption to the supply of energy to Europe will affect wholesale prices in the UK to a greater extent than implied by direct trade links.








  • 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".








  • But we now see more clearly that, in a crisis, for the foreseeable future UK interests are aligned with the US and Europe, especially if China aligns itself more with Russia.








  • The government is likely to face further pressure on its tentative support for onshore wind and solar.










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.





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.





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