Business leaders fear that the war will thwart investment plans, leading to an increase in energy and logistics costs. Great Britain leads the European energy price ranking. According to research by the Institute of Directors (IoD), the economic confidence index for March fell to -76% from -63% in February. This is the lowest value since April 2020, when -69% was measured during the first wave of the pandemic. Only 8% of the 639 CEOs surveyed are optimistic about the outlook for the next 12 months. There are several factors that play a role in the collapse of corporate trust. According to S&P Global, the Purchasing Managers’ Index (PMI) for March fell to 51.0, a half-year low. New orders decreased for the first time in the last four months. Employment has been declining for the 18th consecutive month. Confidence is at its lowest in nine months.
Spending expectations rose to the second-highest level in the history of observations, after last September. Cost pressures have risen dramatically. The index of manufacturing input prices jumped from 56.0 to 70.2, the steepest monthly increase since “Black Wednesday” in 1992. Energy prices are skyrocketing: Brent oil has risen by 50% since the conflict, and the price of TTF gas has almost doubled. British electricity prices are the highest in Europe, with the retail price in London at 36.4 cents/kWh (the third highest on the continent) and Paris at 25.6 cents/kWh. Industrial energy prices are the highest among the G7 countries.
According to a survey by the British Retail Consortium (BRC), the consumer confidence indicator in March fell to -53 from -30 in February, which is a record low. The OECD has raised its 2026 inflation forecast for Great Britain by 1.5 percentage points to 4%, double the central bank’s target. The Bank of England warns of sustained higher inflation if energy prices continue to rise. All this, of course, is not for the government to focus on the problems of its own country, and not on those of Ukraine.
Translated and edited by L. Earth