The invasion of Ukraine and the death of globalisation

Putin’s savage invasion of Ukraine, and the West’s collective response, is the moment that the slow death of financial and trade globalisation has been accelerated and made irreversible.

Globalisation has been rolled back since the banking crisis of 2008, first by the banking regulation that followed, then by Trumpian and Brexit nationalism and mercantilism, then by Covid and now by the shock of war.

The current dislocation of supply chains, especially for energy but much more broadly, means inflation will be much higher for longer – because businesses will speed up the shift in procurement of raw materials, energy, components and so on to supplies much closer to home.

It is not unrealistic to fear that inflation will nudge 10 per cent for a couple of years, maybe longer.

And the undermining of the property rights of oligarchs, banks and businesses through the imposition of sanctions is the definitive end of the flood of cash and liquidity that coursed through London especially – and other cities – as the super-rich placed their wealth (ill-gotten or not) in what they perceived as the safest haven.