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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.

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.

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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.

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.

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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.

• 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.









• The revival of NATO’s purpose and a unified western response have been a necessary if painful reminder of where UK interests truly lie.









• Russia's invasion of Ukraine means significant uncertainty for the UK economy, the chancellor has warned.

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.

How have these changes been reflected in our economy forecast?

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. https://telegra.ph/Unraveling-the-Economics-Behind-News-Stations-Revenue-Generation-04-18 , 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.

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.

• 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.









• Ukraine is known as the "breadbasket of Europe," responsible for a large proportion of the world's wheat.









• The official added that budget talks are "ongoing" and have "always been based on finding a compromise" acceptable to all member states.









• And while commodity prices tend to be only a small proportion of the price of final food products, UK consumers would be likely to see higher prices on supermarket shelves – this could manifest later this year at a time of already high inflation.









• As expected, Vladimir Putin has been officially registered as a candidate for the Russian presidential election this March.

So, price increases and potential shortages in these non-energy commodities represent additional upside risks to our inflation forecast and downside risks to our real GDP forecast. Russia’s invasion of Ukraine in the run-up to our March 2022 Economic and fiscal outlook represented a significant adverse shock, primarily via a sharp rise in gas and oil prices. In this box, we considered where the UK gets its energy from and the channels through which higher energy prices raise inflation.

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.