The Ukraine conflict – considerations for businesses


The Ukraine conflict – considerations for businesses

This page was last updated on March 14, 2022
In response to the current Ukraine conflict, Shipleys is supporting our people, clients and suppliers and has donated to the humanitarian aid effort. With the conflict continuing, and the ramifications this is having at a national and international level, here is some advice and guidance from our team.

Covered in this briefing:

Economic considerations – inflation and interest rates

Sanctions and business links with Russia

Supply chain disruption and exports

Employee wellbeing and safety

Cyber defence and IT systems

Energy supplies and rising costs


Economic considerations


The US, UK and Eurozone are all experiencing inflation at levels not seen for many years, largely driven by rising energy prices. Prior to the invasion of Ukraine, the Bank of England had forecast inflation to peak at around 7.25% in April, when the new OFGEM utility price caps are introduced. Sadly, that now looks very optimistic. Goldman Sachs now expects an annual rate of 8.5% for April peaking at 9.5% in October, when the next six-monthly utility price cap kicks in. After that, it sees inflation remaining above 7% through the first quarter of 2023.

Interest rates

Both the US Federal Reserve and the Bank of England are expected to raise their base rates in March. Yet, although there had been talk in February of a 0.5% increase – double the normal rise – such a jump now seems much less likely.

The central bankers on both sides of the Atlantic face an uncomfortable dilemma. Both central banks thought inflation would be transitory and moved slowly to counter it – and so they now need to act. However, their favoured tool of higher interest rates will be ineffective against rising energy costs and would not be an appropriate action for economies facing the danger of a recession.

Sanctions and business links with Russia

Keeping current with the sanctions

It is important for businesses to monitor the mounting economic sanctions against Russia. Bear in mind that breaches of financial sanctions are criminal offences, punishable by fines and/or a prison sentence.  The UK Government has been updating these pages to reflect the latest developments.  See:

UK sanctions relating to Russia   

UK Sanctions List

Russia: list of persons named in relation to financial and investment restrictions

Businesses should refer to these to find out which people, entities and ships are now designated or specified under the Sanctions and Anti-Money Laundering Act 2018 regulations and why.

Regularly reviewing the guidance will enable you to ensure your systems, policies and teams can adapt quickly.  Clear communication and risk-management within your operations is also recommended.

Economic Crime Bill

Be aware The Economic Crime Bill is expected to become law by the end of March. It is designed to stop allies of Putin from hiding wealth in the UK. The legislation will create a register of overseas ownership of UK land and property.

Pressure to cut Russian links

As a result of the conflict many companies are cutting their links with Russia. This is often in response to growing public and stakeholder pressure.  It is important then to consider what links you have with Russia and the potential risk this presents – both from an operational and reputational perspective.

Ensure any communications relating to your responsive actions are delivered consistently across the organisation and managed carefully.  Guide employees on the organisation’s expectations to publishing comments on social media.

Supply chain disruption and exports

Both Russia and Ukraine produce vital components for many business outputs.  The energy stocks and travel implications the conflict is presenting is also impacting on global logistics. Businesses are already experiencing supply chain disruption and many are switching to their contingency plans. 

Throughout the conflict it will be important to remain in close contact with your suppliers, source alternatives and prepare for rising costs.  Be aware the Export Support Service has set up a dedicated page and helpline during the current conflict.  The helpline is 0300 303 8955. If you need help formulating budget and cashflow projections on different scenarios, do reach out to one of our team.

Employee wellbeing and safety

The distressing nature of the conflict is likely to cause anxiety among employees, particularly if they have personal links with the Ukraine or Russia.  Support and sensitivity will be key here. If your business has and any employee assistance programmes or links with local charities and services who can support with mental health issues, counselling etc do highlight these to your team. 

Many employers who have employees with links to Ukraine are temporarily relaxing certain policies (such as personal calls or compassionate leave requests) to help them support their family.

The Foreign Office has issued advice for UK nationals working in Ukraine and UK nationals working in Russia to leave the country. 

If you have employees still in Ukraine or Russia, help them with any travel arrangements, temporary places to stay and support for them and their families. If UK-national or Ukrainian employees need to stay in the country, it’s important to help them access the necessary finances and supplies they need and to maintain regular contact as the conflict continues in the region.

Cyber Defence and IT systems

The war has been noted for being fought both on the ground and digitally.  Cyber-attacks are increasing and allied countries of Ukraine are being targeted. Both the National Cyber Security Centre and the Information Commissioner’s Office are urging organisations to increase security measures, add additional security layers and deploy software updates quickly. 

As well as shoring up your systems, it is important to highlight to employees the risks of links and emails coming into the organisation.  Consider running refresher training so your teams are alert.

Energy supplies and rising costs

Russia was the second largest gas producer at 17% of global output and was also the third largest oil producer, ‎accounting for 12% of the world’s output, according to BP – which is now withdrawing from Russia. More significantly, the International Energy Agency reckons that last year Russia accounted for 45% of the EU’s gas imports and 40% of its total gas consumption.

These numbers explain why talk of restricting supply has spooked the oil and gas markets, driving up prices. Oil (the appropriately black line on the graph) is up over 25% since the invasion began. Gas prices have risen much faster, because while oil is relatively easy to move between continents, the transportation of gas is more challenging.

The pressure on oil and, particularly in the EU, gas prices will not ease until prospects for energy supplies become clearer. A pinpoint of light is that we are moving into spring, when spring when EU demand for domestic heating and therefore gas normally declines. Business should prepare though for rising costs and set up contingency plans for different scenarios and forecasts.


The unstable nature of the crisis in Ukraine means change is happening rapidly and businesses will need to adapt and adjust.  If the current conflict is having an impact on your business operations, please do reach out to our team.  We have a range of specialists, plus access to the expertise of complementary advisers and our fellow members of AGN – an international association of independent firms. 

Rest assured, the Shipleys team will be monitoring the latest developments and keeping our clients informed.

Current Issues

paint roller with grey paint painting a white wall

NICs revisions and a pension alert for the self-employed

The NIC rates reforms are now live, but a legacy issue from a glitch in the National Insurance Contributions system is still a cause for concern for the self-employed.
Grey keyboard with green 'donate' button

Charity Update Spring 2024

In this bulletin, we discuss The Charities Act 2022’s final set of changes in March, the latest guidance for accepting, refusing and returning donations and The Financial Reporting Council’s latest review of Charities SORP FRS 102 (Third Edition).
Financial Services sector - digital style image image of graphs, numbers etc

Financial Services Update – May 2024

In this issue we cover the latest FCA developments and guidance notes for the sector.