Russian Railways crashes into default as sanctions hammer Moscow

Good morning. 

The World Bank has issued dire forecasts for both Ukraine and Russia this year as a result of the war, warning the outlook could get even bleaker if the conflict drags on.

Ukraine’s economy will collapse by 45.1pc this year, the bank predicted, far worse than the 10pc to 35pc downturn the IMF projected last month. Russia’s GDP is expected to decline 11.2pc.

In a more pessimistic scenario, which reflects an escalation of the conflict, there would be a larger negative impact on the euro area, increased western sanctions and a financial shock due to eroding confidence.

The region’s economy would contract by nearly 9pc – worse than the 2008 global financial crisis – with a 20pc decline for Russia and a 75pc collapse for Ukraine, the report said.

5 things to start your day 

1) Up to 40,000 civil service jobs face the axe: The number of civil servants has jumped by more than a fifth to 485,000 in the past seven years in response to Covid and Brexit

2) Russians slash their spending as sanctions batter the economy: Spending falls by 10pc as economists expect Russia to be hit by a deep two-year recession

3) Airlines brace for £100m bill from Easter travel chaos: Further flight cancellations are expected over the next week as Easter travel chaos continues

4) Ambrose Evans-Pritchard: Marine Le Pen’s national socialism is a potent political brew: The economic agenda of Emmanuel Macron’s opponent is a celebration of the welfare state and the French social model

5) Twitter must wean itself off advertising, says Elon Musk: Biggest shareholder calls for price cuts and improvements to Twitter’s paid-for subscription service

What happened overnight 

Asian shares dropped on Monday, while the euro edged up a fraction as the far right lost the first round of the French presidential elections.

Japan’s Nikkei plummeted by 0.6pc after shedding 2.6pc last week, while Chinese blue chips lost 1.8pc.

Coming up today

• Corporate: Sirius Real Estate (trading statement)
• Economics: GDP (UK), industrial production (UK), manufacturing production (UK), consumer price index (China)