RUSSIA’S invasion of Ukraine could push up the cost of your weekly shop, petrol and more as the war continues.
Brits are already feeling the crunch under a cost of living crisis, but the war could drive up the cost of household essentials and bills further.
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As the crisis continues, Brits are already seeing it have a knock-on effect on their energy bills and filling up at the pump.
It’s bad news for the one in ten families on the brink of a financial crisis as household budgets are already being stretched to the max.
Here, we break down why six key costs are set to increase due to war in Ukraine.
Energy costs
Russia is one of the world’s largest oil producers, supplying Europe around 40% of it’s gas.
While Britain only imports around 5% of it’s gas from Russia, the UK relies on pipelines that run through Belarus, Poland, Ukraine and into Germany.
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Should tension with Russia continue, Putin could opt to cut off supplies to Europe all together.
Experts have said there is no chance of the UK’s energy supply being cut off entirely or of the country running out of fuel.
Instead the concern is “high gas prices set by international markets”, which are increasing due to the war.
It could mean that energy bills could hit an eye-watering spike to energy bills, seeing Brits fork out £3,000 a year should the conflict continue.
This comes on top of already soaring energy costs in the UK.
The price cap will increase by £693-per-year in April when the price cap is next readjusted from £1,277 up to £1,971.
Bread and biscuit prices
Ukraine has been historically nicknamed as the “breadbasket of Europe” due to its vast fields of wheat.
Together, Russia and Ukraine produce 29% of the world’s wheat, 19% of corn and 80% of sunflower exports.
It means a supply crisis could build as the war continues, and Brits have been warned that everyday items like bread and biscuits could therefore shoot up in price.
And Russia stopping wheat exports to the UK would only add to the issue.
Canned goods prices
The price of canned goods are set to rise as the Russia-Ukraine conflict continues.
That’s because the cost of the actual tins food and drink are stored in could increase.
Aluminium and nickel prices have already gone up by 30% since the start of the year.
The London Metal Exchange has warned these rising metal prices will see the price of canned goods go up – with costs most likely being passed down onto consumers.
Cost of beer
The cost of beer could soar due to a rise in barley costs.
Ukraine is in the top five countries for barley production – and concerns have been raised that exports could be halted under the war.
Danish brewer Carlsberg has reported that it has halted operations at two Ukrainian breweries in Kyiv and the southern city of Zaporizhzhya due to the escalating conflict.
It comes as Brits are already facing paying more for their bevvies.
Soaring inflation has already added to the price of a pint, which is likely to hit £7 is some part of the country this year.
Beer lovers have been warned the cost of a pint could reach £10.50 by 2030 if rampant inflation continues.
Petrol prices
Petrol costs are linked to the price of oil on the wholesale markets.
The more it costs to purchase and supply the oil, the more petrol stations will have to pay, which is then ultimately passed on to motorists filling up.
Russia is one of the world’s largest producers of oil – and experts have raised concerns about how the war could impact both the distribution and price of fuel.
The war has already seen the price of crude oil soar – which is hitting drivers at the pumps.
Prices last week climbed to record highs – drivers were paying 152.20p for petrol and the price of diesel also rose to 155.23p.
Meanwhile, about a fifth of the UK’s diesel comes from Russia.
Should exports be cut off by Russia in retaliation at UK sanctions, diesel prices could soar again.
Mortgages and Savings
Interests rates could increase after Russia’s invasion of Ukraine and that ha a knock-on effect for homeowners.
The Bank of England’s rate-setters may need to hike up borrowing costs to offset soaring fuel and grocer prices, Capital Economics forecasters fear.
It means that the 2million homeowners who are on tracker or variable mortgage rates could feel the squeeze.
This is because mortgage lenders typically increase their rates in line with the Bank’s base rate of interest.
If you’re not protected by a fixed deal then your repayments will go up too.
David Hollingworth of mortgage broker London & Country said: “We could see mortgage rates pushed up further and products being withdrawn and replaced with higher rates.
“On the plus side, despite the fact that rates have already been increasing the available deals are still very low in historical terms.
“But borrowers can’t rest on their laurels – rates have been moving quickly already and any conflict could only add to uncertainty in the markets.”
This is already on top of five more Bank of England hikes in 2022 alone the experts are expecting.
Increases could bring interest rates up to 1.75% from the current 0.5%.
This would add hundreds to annual mortgage repayments for households.
And if conflict in Ukraine caused interest rates to hit 2%, mortgage rates could rise to a massive 3.2% for new borrowers.
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