The hum of drones over St Petersburg has drowned out the usual pomp of Russia’s premier economic summit. For years, the St Petersburg International Economic Forum was a stage for deals and handshakes. But as Ukrainian drones struck the city’s outskirts this morning, the event became a symbol of a war economy under siege.
On the ground, delegates hurried between sessions on debt restructuring and trade corridors, their chatter broken by air raid sirens. The Russian central bank had just raised interest rates to 18% a desperate bid to tame inflation now running at 8.3%. Meanwhile, the UK Treasury announced fresh sanctions targeting metals and diamonds, closing loopholes that had allowed Russian goods to reach global markets.
For the workers of the North West of England, this is not abstract geopolitics. The price of aluminium for car parts and window frames has already jumped 12% since January. A mill manager in Rotherham told me: “We can’t pass these costs on. Customers are struggling. Another rise and they’ll switch to Chinese steel.” The Treasury insists the new measures are “tightening the vice” on Putin’s war machine. But at the kitchen table, families are counting the cost.
Union leaders, who met in Manchester this week, are watching the ripple effects. “Sanctions are necessary,” said one shop steward from Unite. “But if they drive up our bills while wages lag, we’ll see more strikes, not fewer.” The rail dispute this summer showed how quickly inflation can fray the social fabric.
Back in St Petersburg, president Putin took the stage, vowing that Russia’s economy would adapt. “We are not isolated,” he declared, citing trade with China and India. But the drone strikes, which damaged an oil depot and forced flight cancellations, told a different story. The war is no longer just in Ukraine; it is here, in the heart of Russia’s financial district.
For the British worker, the real economy remains the one where a pint of milk costs more each week. The chancellor’s promise to “growth proof” the country sounds hollow when factories in Burnley are shuttering. The drones over St Petersburg are a reminder that the war’s economic front line runs through every high street.
