Our NIESR policy paper considers several channels expected to affect the global economy. Trade restriction as the result of sanctions imposed on Russia.
Higher energy prices,
Higher European public expenditure on refugees and defence.
Higher uncertainty and investment risks globally.
Higher exchange rate risk in Russia.
The analysis was done in the very early stages of the conflict, which means the results are derived from the limited sanctions announced in the first few days of the war.
Moreover, in the simulation there was a positive impact to Russian GDP from the increase in energy prices. There is significant risk of more material losses if energy and gas trade is restricted and other financial sanctions bite.
So the trouble in UK could be created by the G7 response to the War of Ukraine.
Just a thought.
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