Sterling saw a squeeze overnight weakening against both Euro and the US dollar, as increase in living costs and inflation could cause a bigger impact than previously expected. UK households are now facing its biggest fall in living standards for half a century as the Russian-Ukrainian conflict intensifies. Increasing gas and oil prices because of the conflict could see inflation rocket above 8%, this could contribute to to incomes falling 4% in the coming financial year.
Russia has threatened to cut natural gas supplies to Europe in response to sanctions imposed over the invasion of Ukraine. This move is expecting to be a tit for tat move as western economies continue to look at new ways to sanction Russia for the conflict. This news comes as one of the biggest buyers of Russian gas, Uniper confirmed they will not sign any new long-term deals and will receive fuel as part of their existing contracts.
Asian and European markets continued to drop as concerns grow that commodity prices will increase inflation and stop economic growth. The S&P500 dropped to its lowest level since October 2020, as Traders worry that a threat of a recession is looming.
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