‘There is little about this Ukraine war that is contained. One of the aspects of the current crisis is that it has seismic impacts on a wide range of issues.’ Picture: Getty
Financial markets are one barometer of the impact beyond Ukraine’s borders. But historically, markets have found it very hard to price geo-political risk. Moves may appear indiscriminate, but they are widespread and substantial with significant impact on general savings, pension funds, sovereign wealth funds and others.
For example inflation. Inflation has been a hot topic in markets for the past year as Central Banks gave up on their view of price increases being only transitory. Annual price increases of over 7 per cent have become a hot political issue in the US. However, now, the risks around cuts to oil supply or possible embargoes have pushed gas prices at the pump in the US to well over 4$ a gallon – double what they were 20 months ago.