A frustrating Easter is in prospect for anyone on the move. Climate activists managed to block entrances to fuel depots at Hertfordshire, Essex and Warwickshire, leaving many forecourts without fuel supplies in the south of England. Meanwhile, acute staff shortages have seen dozens of flights delayed or cancelled at UK airports in recent days, hardly good news for passengers or the nation’s carriers for that matter.
Across the Channel, none of the candidates achieved an absolute majority in the first round of the French Presidential election, so Emmanuel Macron and Marine Le Pen will again square-off in two weeks’ time to see who will be handed the keys to the Élysée Palace. Macron seems likely to carry the day, but an upset outcome à la Brexit could trigger an initial sell-off in French bonds and equities, giving way to longer-term concerns over Le Pen’s protectionist trade policies.
It’s not known if Vladimir Putin was paying much attention to news out of Paris over the weekend. The impact of financial and trade sanctions on the Russian economy are becoming hard to ignore for the Kremlin, let alone the comrade in the street.
The rouble dropped sharply in early currency trading this morning after Russia relaxed some capital control measures aimed at propping up the currency. Companies are still being forced to convert a proportion of foreign exchange revenues into the domestic currency, though news has emerged that Russia is halting bond sales for the remainder of the year as borrowing costs have gone through the roof.
UK markets could also be in for a jolt if the Chancellor of the Exchequer, Rishi Sunak, is forced out of office because of a string of disclosures regarding his tax arrangements, along with controversy over his wife’s non-domicile status. Sunak, who until recently was a shoo-in to take the reins from Boris Johnson, maintains that he made full disclosure to the relevant civil servants, who sanctioned his subsequent declarations.
Investors in agribusiness will be interested to learn that Peel Hunt has published a note on food inflation, concluding that it is returning to “a material proportion of consumer spend as inflation is likely to top 10 per cent”. This will come as no surprise to consumers. But things could get much worse. Specific industries such as brewing and apparel manufacturing will see further increases in input costs, while political instability in poorer nations could mean that they could eschew free trade in favour of preserving agricultural surplus. It’s sobering to think that we may only be at the beginning of the crisis.
