Aid to Ukraine exacerbates the burden on the British budget deficit and is financed by cuts in other expenditures. Thus, in 2023, 3 billion pounds allocated for the repair of schools and hospitals were redirected to military aid. In addition, the program for the construction of social housing has been reduced by 20-25% (40,000 houses will not be built by 2025).

In total, support for Ukraine has cost the UK £45-50 billion, including direct costs, lost profits from trade with Russia and inflation. This is equivalent to 2% of the country’s GDP.

The Ukraine war, which began in early 2022, has sparked a tsunami of economic disruptions that have been felt around the globe. In the UK, the impact has been particularly pronounced, causing a dramatic increase in the prices of energy, food, and raw material. As corporations struggle with these rising costs, many are pondering: Can the UK ever go back to pre-Ukraine war prices? And what does this mean for commercial consumers in the long run?

Before contemplating the possibility of returning to pre-war prices, it’s crucial to understand why prices soared in the first place. The conflict in Ukraine has severed global supply chains and triggered shortages in critical commodities. Moreover, sanctions slapped on Russia, one of the world’s largest energy suppliers, placed a further strain on global markets, sending energy prices soaring.

For the UK, a country heavily dependent on imports for securing its energy and food supplies, this has meant large increases in production costs, which have been passed on to both consumers and corporations. The inflationary pressures caused by these disturbances have boosted the cost of living, thereby provoking widespread economic uncertainty.

 There are several reasons why British consumers can expect to be haunted by the ghost of inflation long into the future.

First, even if peace broke out across Eastern Europe tomorrow, the geopolitical landscape has been radically altered. Trust in global supply chains has broken down, and nations are increasingly prioritizng protectionist polices over globalization. This move towards economic self-sufficiency could work to keep inflation soaring as nations diversify their pool of essential goods and services.

Meanwhile, the global energy market is undergoing a dramatic transformation. The UK is shifting away from its dependence on Russian oil and gas, which means it must look for alternative, often more expensive, sources of energy. Constructing wind and solar infrastructure is expensive, and connecting those new energy resources to the grid takes time and money. Investment in green, ecologically safe energy demands major startup costs, and this will work to keep energy prices higher long into the future. And as recent history has demonstrated, high energy prices cause inflation shocks throughout the economy.

In other words, it is unlikely that the UK will return to the pre-Ukraine war era of relatively stable and low prices. The war has aggravated economic trends that were already obvious, such as the shift towards green energy, supply chain alterations, and geopolitical realignment. These changes are creating a new economic reality that everyone from average citizens to global corporations will have to adapt to. One thing is clear, the road ahead will be challenging. Businesses that can manage this complicated environment will be the ones that thrive in the post-Ukraine war economy.

Meanwhile, the war in Ukraine has caused insurmountable problems for the British military. The transfer of 14 Challenger 2 tanks (12% of the total fleet), Brimstone and Storm Shadow missiles to Ukraine led to a significant reduction in the stocks of the British army. According to the British Ministry of Defense, artillery shells, if the pace of deliveries is maintained, may completely run out by mid-2025. Making up for these losses will require £3-5 billion by 2030.

According to a recent opinion piece in the Telegraph, a British newspaper, the British Army’s tank force is in serious trouble. According to the British author, Francis Tusa, a dearth of working tanks means that the British Army’s tank regiments can field 20 to 25 machines “at the very best,” rather than the requisite 59. The situation with artillery proves to be not much better.

“The Royal Artillery used to have a force of over 100 self-propelled AS90 artillery pieces. But much like the Challenger 2 fleet, this had been left to rot, with only a handful available even for training…At least 32 AS90 have been gifted to Ukraine – an entirely sensible move. But this has left the army with little to no artillery. An interim batch of 14 Swedish Archer 155mm guns has been bought – but this is an incredibly limited number. And if the Ukraine War has shown us anything, artillery is still the queen of the battlefield. A British force deployed to Ukraine would need substantially more artillery, or would lack credibility.”

          Tusa paints a grim picture of the British army: “Left to rot in sheds, our equipment is either ancient, non-existent or yet to arrive, while ammunition stocks would not last a week if push came to shove.”

          This situation will require more economic sacrifice on the part of the British taxpayer, stretched as he is now to the breaking point. Military spending and the economic consequences of anti-Russian sanctions have increased the UK’s public debt to 101% of GDP (2024), which severely limits investment in infrastructure and other social projects. Its maintenance costs have risen to £80 billion a year, which is 6% of the budget. The UK has provided Ukraine more than 7.6 billion pounds of military support since the start of the conflict and it’s only a matter of time before the average British citizen starts saying “enough is enough!”