The British government is pushing for Russia to be expelled from the Swift global payment network as the UK braces for a spike in gas and oil prices following Vladimir Putin’s order for an invasion of Ukraine.
According to ITV, Boris Johnson yesterday raised the possibility of kicking Russia out of Swift during a meeting of the G7 leaders. But “there was resistance from, among others, the United States”.
Many countries have already raced to impose other sanctions on Moscow following the unprovoked attack on Ukraine. But all of the measures against Russia will have negative impacts for the West too. Here is how the UK could be affected by the outbreak of war.
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1. Oil and gas prices
The Times’ policy editor Oliver Wright said that Britons should be ready for “significant rises in petrol and gas prices” after “international oil prices surged by nearly $6 per barrel to more than $100, levels not seen since 2014 when Russia annexed Crimea”.
Coupled with warnings of an April cost of living crisis, Russia’s actions will likely “push the average price of petrol over £1.50 in the latest blow to household finances”, he added. UK officials said they are “braced for significant petrol price rises at the pump”.
“Russia is Europe’s largest supplier of natural gas,” the i news site said, “providing around 35% of the gas used across the continent.” But “the UK’s reliance on Russian gas is far less significant, at just 3%”.
However, “the UK is not protected from rising prices purely because it relies less on Russian gas”, the site warned. “The UK market is closely connected to markets in mainland Europe, meaning a price rise on the continent will likely lead to higher prices here too.”
2. Tit-for-tat sanctions
The government has already announced a package of sanctions against Russia, targeting Kremlin-linked billionaires, banks and companies. However, those sanctions are “now expected to be significantly expanded”, said The Times.
“As well as the disruption to existing trade flows, sanctions are likely to damage British companies and banks with investments in Russia,” said the paper. The war will also “damage economic confidence as the global economy still labours to recover from Covid-19”.
Moscow has already moved to respond to the UK sanctions package. The Russian civil aviation regulator today announced a ban on British airlines landing at Russian airports due to “the unfriendly decisions by the UK aviation authorities”, the BBC reported.
The UK yesterday banned Russia’s national airline Aeroflot from landing in Britain.
3. Food prices
Ukraine is known as the “breadbasket of Europe” and along with Russia makes up 29% of global wheat exports, 19% of corn and 80% of sunflower oil. That means “the price of items such as bread, baked goods and beer could rise”, The Times warned.
Given that the conflict is still unfolding, “some price rises may be magnified if there are blockages in the Black Sea”, it said.
Depending on how long the fighting continues “the food chain could also be hit if Russian chemical supplies for fertiliser are affected” as “disruption could harm the forthcoming harvest in Britain”, the paper added.
Russia has already put all ships on “stop” in the Azov Sea, where most grain is shipped from, a grain industry source told Sky News.
“Wheat prices went up £15 a tonne” in the hours after Putin gave the order for an invasion, the broadcaster said, while “soybeans hit their highest prices since 2012” and “corn jumped to an eight-month peak”.
4. Cyberattacks
“Millions of companies across Britain” were warned “to prepare for a Russian cyber attack” after the government slapped sanctions on Moscow, the Daily Mail reported.
GCHQ’s National Cyber Security Centre (NCSC) urged UK businesses and organisations to “bolster their online defences”, warning that there has been a “historical pattern of cyber attacks on Ukraine with international consequences”.
Ukrainian banks and government websites were hit with a spate of cyber attacks last week prior to the deployment of Russian troops to Luhansk and Donetsk. Ukraine’s minister of digital transformation said the attacks have continued since the full invasion.
Defence Secretary Ben Wallace has said the UK will launch retaliatory cyber attacks on Russia if it targets the country’s computer networks, telling the House of Commons that “offensive cyber capability” is being developed. But the efforts to disrupt Ukrainian infrastructure have prompted “concerns that the same sort of attack could now be attempted in the UK”, the Daily Mail said.
5. Boots on the ground
The prime minister has said that the UK is planning to send more weapons and non-lethal kit such as helmets to Ukraine. Other Nato member states have pledged similar measures.
But as Ukraine is not a Nato member state, “the alliance will not provide military support in the form of troops”, Oliver Wright said in The Times.
