The Western sanctions imposed on Russian energy imports could have a “catastrophic and long-lasting” effect if fully implemented, while the existing restrictions placed on Russia’s central bank are particularly effective, a report on the measures by the cross-party Treasury Committee showed on Wednesday.

Key takeaways

“Russia faces both a significant hit to the size of its economy and significant inflation.”

“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.” 

“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 UK should improve the clarity of its guidance on sanctions to help the private sector implement them.”

This report by the UK lawmakers come a few hours before the country’s Spring Budget release for 2022. Meanwhile, GBP traders also gear up for the month of February’s inflation data from the British economy.

Read: UK Inflation Preview: Another hit to British households, and to the pound?

Market reaction

GBP/USD is consolidating its rebound to 1.3300 amid an improved market mood and a minor pullback in the US dollar.