Russia invades Ukraine, damaging the global economy

Due to events over the past 24 hours, with Russia now intent on installing a “friendly” government in Ukraine, we have moved our global baseline in line with our scenario for a full-scale invasion.

What you will learn:

• Although a protracted military conflict is possible, we still do not expect a permanent occupation of all of Ukraine by Russia in our base case.
• Russia’s actions clearly show that a prolonged period of instability, with possible large spillovers for Europe and potentially the world, is now more than a tail risk.
• We will incorporate higher European gas, oil and food prices over the medium term in our baseline, as well as more financial market disruption and tougher EU and US sanctions on Russia.