FT News Briefing The global impact of Putin’s war
Mar 30, 2022
Russia is scaling back military operations near Kyiv, sparking discussions about the future of peace in the region. Meanwhile, Barclays has faced a staggering £450 million loss due to a clerical error that led to an unauthorized issuance of financial products. The war in Ukraine continues to disrupt the global economy, affecting energy costs and inflation. Experts analyze how these events are intertwined, stressing the need for a cohesive global economic response amidst an already struggling post-pandemic landscape.
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Skepticism Surrounds Russia's Announcement
- Russia announced scaling back military activity near Kyiv after peace talks, but Western countries are skeptical.
- Ukraine seems prepared to accept neutrality in exchange for security guarantees from major powers.
Global Economic Impact of the War
- The war in Ukraine is disrupting commodity markets, particularly energy and food, leading to increased prices.
- This surge in inflation, combined with reduced output, creates a stagflationary environment reminiscent of the 1970s.
Government and Central Bank Responses
- Governments should focus fiscal support on the poorest, who are most affected by rising energy and food prices.
- Central banks face a dilemma, as tightening monetary policy to combat inflation could worsen the economic slowdown.