"The task facing the Bank of England and other Central Banks has been made much harder by Russia’s invasion of Ukraine.

If the conflict in Eastern Europe continues for a period of months, the effect on the global economy could be catastrophic. As Russian tanks crossed into Ukraine yesterday, the price of a barrel of oil rose above $100 for the first time in seven years and the wholesale price of gas, which has already quadrupled in little over a year, rose by 60%.

With inflation in the UK already at 5.4% and rising. Just as the country is emerging from the Coronavirus Pandemic, another major situation has now arisen.

A further significant rise in the cost of energy will no doubt push inflation even higher than had been predicted, while if the oil price remains above $100, it will hit global growth hard.

The World Bank had already predicted that global growth in 2022 would be 4.1%. This was down from its earlier prediction in October of last year of 5.5%. There is little doubt that it will be revised lower again when the data is updated at the end of next month.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.