It’s a fortnight into the first war between major European nations for many decades, with Ukraine appearing ready to defend its independence from Russian invasion and both sides representing a willingness to dig in for the long term. Clearly there are a massive range of issues, with humanitarian ones being the most pressing. Readers will no doubt be following developments from a human perspective and without detracting from an issue which is of huge concern, we consider some of the potential issues from a business perspective for our clients.
The analysis of inflation and interest rates is often something of an abstract exercise. But the war will compound a range of pressures here in the UK. If nothing else than by way of impact on energy and commodity markets it will tend to push up inflation, but as we all now know of course Ukraine is a big exporter of agricultural projects and it’s the market access but also the practical reality that farmers defending their country are not making the most of planting season. Russia is of course also a major commodities producer and many of those markets will be disrupted to by the sanctions put in place by most Western countries including those such as Germany and Poland with a heavy reliance on energy imports from Russia.
This underlines the domestic impacts – we tend to think of housing associations as pretty resilient to external shocks, but it’s not such a simple story for individual residents and that linkage may become very apparent depending on how things pan out and over what timeframe…