Sanctions pushing Russia towards economic catastrophe, U.K. says

The U.K. government should press ahead with its sanctions against Russia as they are inflicting pain on Vladimir Putin’s regime, but should also help lower income families cope with the knock-on effect of higher energy and other living costs, a group of lawmakers said Wednesday.

Sanctions mooted by the U.S., European Union and U.K. against Russian energy imports could have a “catastrophic and long lasting” effect if fully implemented, while the existing restrictions placed on Russia’s central bank is particularly effective, a report on the measures by the cross-party Treasury Committee said. “Russia faces both a significant hit to the size of its economy and significant inflation,” it said.

However, the parliamentarians also warned that the U.K. isn’t protected from the economic consequences of sanctions on oil and gas. The government should introduce support for those who are particularly vulnerable to such price rises, the report said.

“The Committee will continue to investigate what additional tools we have in our armory to bear down on Putin’s aggression and to further damage the Russian economy and its ability to fund this war,” Chair Mel Stride said in a statement. “This war will also have economic consequences here at home, and while these are worth bearing to support Ukraine in their fight for freedom, it’s becoming increasingly clear that the Government will need to support those who are hit hardest.”

The U.K. should improve the clarity of its guidance on sanctions to help the private sector implement them, the report said. It should also consider increasing the funding and staff numbers of the Office of Financial Sanctions Implementation, which is part of H.M. Treasury, the report said.