ALEX BRUMMER: Russian lessons for us all

The dramatic events in Russia cannot be viewed with any equanimity. 

Reaction from the financial markets was to mark down European defence stocks on the grounds that the need to prop up Ukraine’s sovereignty may be foreshortened.

The rouble also tumbled to a 15-month low point but is less relevant to Western commerce now that so many firms have pulled out of Russia.

The country may now be regarded as a ‘second world’ nation in terms of economic importance, but the power struggle at the top, brought into sharp focus by Yevgeny Prigozhin and his Wagner mercenaries, is ignored by Western leaders at their peril.

Moscow still has its finger on the nuclear trigger and has demonstrated in its aerial bombardment of Ukraine that it is not averse to threatening the safety of civilian nuclear plants and dams on which countless lives depend.

Power struggle: Vladimir Putin’s war on Ukraine is among the reasons why British consumers pay 40% more for pasta and suffering through a cost of living crisis and surging mortgage bills

Russia’s invasion 16 months ago is having a dramatic impact on all our lives.

It is among the reasons why British consumers pay 40 per cent more for pasta and suffering through a cost of living crisis and surging mortgage bills. 

The manner in which Western economies had to radically reshape their energy policies, in the face of the cut-off of oil and gas supplies from Russia, has been an enormous blow to prosperity.

Fiscal policies, already blown off course by Covid, took an enormous hit as domestic energy prices were frozen and some costs shifted from users to government.

The pass-through of higher energy prices to businesses is among the most critical factors behind the surge in goods and services prices. 

Many firms used the cover of energy costs to seal in stronger profit margins after the hit taken in the pandemic.

Needless to say, pay agreements in both the private and public sectors have exploded, with average wages up 7.6 per cent in the three months to April. 

Uncertainty about events in Russia and Ukraine can only add to an entrenched shock which is changing the face of the Western world.

The eurozone has been pushed towards recession and may eventually have to pick up much of the bill for rebuilding Ukraine’s economy. 

In Britain, homeowners, worrying about rocketing mortgage repayments, might reflect that a chunk of this is a consequence of the geopolitical fallout from Vladimir Putin’s ill-conceived invasion.

The central bankers club, the Basel-based Bank for International Settlements, rarely speaks out. So when it does, it is worth listening. 

It warns that an ‘inflationary psychology’ is in danger of embedding in the Western democracies, and the global economy is at a critical juncture.

Its top official Agustin Carstens urges an end to monetary largesse and tough steps to cut budget deficits and debts. At best the weekend’s drama in the Steppes could speed an end to the Ukraine-Russia war.

A more likely outcome is that it will load fresh uncertainty onto the UK and Europe – and exacerbate the struggle to restore price stability.

Last picture show

The ambition of Cineworld kingpin Mooky Greidinger to create a British-based movie powerhouse which spanned the globe was to be admired. 

But the acquisition of the Regal chain in the US for £2.1billion in 2017 was a step too far.

Not only did it contribute to a net debt pile of £7billion but it failed to anticipate how technology and consumer tastes were transforming entertainment.

Netflix and the rise of streaming have proved a body blow for cinema-going and Hollywood has been running out of ideas.

Almost all the blockbusters have become derivatives of Marvel and other comics I once enjoyed as a schoolboy.

The pandemic ushered in the age of binge watching on the sofa. Business class seating, cocktails and finger food in cinemas failed to cut it.

Now Cineworld is in administration on both sides of the Atlantic. The 128 UK cinemas will remain open for the moment but for how long?

As a recent visitor to Washington DC, it was sad to see so many of the great picture houses, once frequented, as shuttered construction sites.

As for Mooky and his family, dreams of riches beyond avarice may have gone.

For some inexplicable reason, the US bankruptcy court decided they deserved a payout of £27.5million for their trouble.

Not a good look for shareholders wiped out and employees wondering where the next pay cheque is coming from.

This post first appeared on Dailymail.co.uk