What are the economic consequences of the Ukraine-Russia war on the UK?
What is the reason for the rising cost of living in the UK following the Ukraine-Russia war?
How has the UK put pressure on Russia so far over its invasion of Ukraine?
Why do political and economic experts warn about the consequences of further sanctions on Russia by Western countries?
The UK media warns that the Ukraine crisis is tripling the cost of living in the UK and has placed the possibility of the economic collapse of some households at record highs.
Rising Tensions in Ukraine
The fire of the Ukraine-Russia War has been poked by some Western countries. Rather than trying to end the war through political and diplomatic channels, these countries, particularly the US and the UK, have resorted to sending weapons and paramilitary forces to Ukraine in addition to imposing sanctions. “The people of Ukraine are fighting for freedom and democracy, not just for Ukraine but also for the whole of Europe because that is what President [Vladimir] Putin is challenging. And absolutely, if people want to support that struggle, I would support them in doing that,” UK Foreign Secretary Liz Truss told the media in an interview with the BBC.
The Rising Cost of Living in the UK
The UK media warns that the Ukraine crisis is tripling the cost of living in the UK and has placed the possibility of the economic collapse of some households at record highs. With the current trend of rising fuel prices, gas prices are rising by 70% and household energy bills will average £4,000 a year, more than double the price for last year. The price of oil and gas is constantly rising, as well as the price of petrol, which will increase the cost of transportation and, consequently, the price of all goods and services.
Rising Prices in the UK in the Coming Months
The government is set to raise energy prices again next month. The rapid rise in oil prices has pushed petrol and diesel prices above 2.1 pence in some parts of the UK. The British media reports the shock in terms of price increases for flour, wheat, oil and some other foodstuffs and goods in the country. The war between Russia and Ukraine, one of the world’s largest producers of wheat and oilseeds, has pushed wheat prices up by 55% in European markets. According to media reports in the UK, household incomes in the country are falling by an average of £1,000 this year, an unprecedented drop in the last half-century.
Ban on Oil Imports from Russia to the UK
The UK plans to announce a ban on oil imports from Russia in the coming months. The decision is expected to be implemented gradually over the next few months to avoid a severe overnight shock and driver confusion over fuel purchases. British officials say the ban will be enforced over a long period of time to allow global markets to adjust and people to avoid scary petrol prices.
There will be no embargo on Russian gas at this time, but it is still being discussed in the government. The UK is less dependent on fossil fuel imports from Russia than most European countries. Germany still opposes full sanctions on Russia. Russia’s oil supply to the British market is not significant. The UK imports 8% of its oil and 18% of its diesel from Russia.
Boris Johnson’s Six-Point Plan Against Russia
The UK PM Boris Johnson stated that the purpose of the plan was to impose maximum economic sanctions on Moscow and avoid direct military action against Russia. Boris Johnson has drafted a six-point plan for what he calls ensuring Russia’s defeat in the Ukraine war, and has called on Western leaders to support it. “It is not enough to express our support for the rules-based international order – we must defend it against a sustained attempt to rewrite the rules by military force,” said Boris Johnson who has previously pushed for sanctions and anti-Russian measures in parliament. According to British media reports, the plan includes an international humanitarian coalition to help Ukrainian civilians, support the country’s self-defence capabilities and put more economic pressure on Russian President Vladimir Putin.
The Collapse of the Western Economy with the Embargo on Russia
Former British Minister of State for Europe and the Americas Alan Duncan has warned in an interview that the West will impose more sanctions on Russia over the Moscow attack. Ukraine needs to be more cautious, as more sanctions could lead to the fall of the West. “We’ve got to be careful not to sanction ourselves.
There is this auction of indignation, which all of us totally understand, against anything to do with Russia. So they ban this, ban that and ban everything, but in the end, we’re going to end up banning our own supplies,”Duncan said. He stressed that “We want to thwart Russia with sanctions, but now with the same sanctions, we are on the brink of collapse and are on the verge of economic collapse. If this unrest and instability continues, the gas supply companies in Europe will go bankrupt in a few days, and as a result, the gas supply to the factories and companies will be disrupted, and the economies of the countries will collapse. And the thing about gas is you cannot substitute it in the way that you can more easily do so with oil. With oil, we can ship it from somewhere else,” the former British minister said.
Sanction of Russian Oligarchs in the UK
The UK Government has imposed sanctions on Russia and frozen the assets of oligarch Roman Abramovich, owner of the Chelsea Football Club and one of the six richest and most influential Russian oligarchs. In a statement, the British Government noted the special privileges Abramovich had received from the Kremlin and his role in the Ukraine crisis through his trade relations.
According to the statement, Abramovich is a major shareholder in a steel and mining company called Evraz PLC, which may have provided stainless steel to the Russian military for tank production. Under the embargo, Abramovich’s assets in the UK were frozen and he is also subject to a banking and travel ban. Other Russian oligarchs who were boycotted include Igor Sechin, Oleg Deripaska, Andrey Kostin, Alexei Miller, Nikolai Tokarev, and Dmitri Lebedev. Abramovich’s sanctions will have major consequences for the Chelsea Football Club. Culture Secretary Nadine Dorries said that a special permit had been issued to continue the team’s games and pay the salaries of its staff. Season ticket buyers could go to competitions, but Abramovich would be deprived of the club’s ownership interests.
The UK, seeking a consensus against Russia from the first hours of the war in Ukraine, has begun a large-scale effort to exert maximum pressure on Russia. The Ukraine-Russia war has had a devastating effect on the UK economy, and political and economic experts believe that a continuing crisis could lead to the UK’s economic collapse.
