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Could the Ukraine Crisis Hit UK Industry?

As the standoff between Russia and Ukraine continues, there are concerns that the crisis could begin to impact on UK industry.

In a recent interview, President Putin has threatened to cause major disruption to the energy supplies in Europe by cutting off gas supplies. As Europe is still highly dependent on Russia for gas supplies, this could cause a price hike in Europe – including the UK – where many people are already struggling to pay their spiralling energy bills.

It has been reported that the gas supplies have already been slowed down, however, this is not likely to cause any major problems at the moment as a White House spokesman pointed out that European gas supplies were still high because of the relatively mild winter, which means any reduction in the supply of gas won’t be felt for a while.

Another major concern over the Russian incursion to Ukraine is the damage that it could do to manufacturing in the UK. If there is a reduction in the supply of gas to Europe, then this would mean that manufacturing businesses that are highly dependant on the supply of gas from Europe could begin to suffer.

There are worries that if the Ukraine crisis continues and the gas supplies to UK industry are affected, that this could ultimately lead to job losses in the manufacturing sector.

The UK only has a limited supply of gas should an emergency hit – about 15 days’ worth – which could leave the manufacturing industry in crisis should the Ukraine crisis continue.

One of the sectors that could be heavily hit is the ceramics industry and the British Ceramic Confederation (BCC) has been quick to speak out about this.

In a press release issued recently, Dr Laura Cohen, the chief executive for the BCC, said:

“Energy security is essential in any modern industrial economy and we need to see urgent action to address this matter.

“We have campaigned in the past for Government intervention to protect industry from gas shortages.

“Last year, the BCC raised concerns after UK gas supplies fell dangerously low following a prolonged cold spell in March.

“One year on and we now face a different situation. The problems in Ukraine reinforce the need for the Government to ensure the UK has extra gas storage capacity and a requirement to hold adequate safety stocks.

“Uncertainty over supply has led to terrible price volatility in the past and will do so in future, leading to harmful effects on manufacturing and investment and a possible loss of jobs.”

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