ALEX BRUMMER: Russian lessons for us all

The dramatic events in Russia cannot be viewed with any equanimity.

The reaction of the financial markets has been to downgrade European defense stocks as the need to support Ukraine’s sovereignty may be shortened.

The ruble also fell to a 15-month low, but is less relevant to Western trade now that so many companies have pulled out of Russia.

The country may now be seen as a ‘second world’ nation in terms of economic importance, but the power struggle at the top, brought into sharp focus by Yevgeny Prigozhin and his Wagner mercenaries, is being ignored by Western leaders at their peril.

Moscow still has its finger on the pulse of the nuclear trigger and has shown with its aerial bombings of Ukraine that it is not averse to threatening the safety of civilian nuclear power plants and dams on which countless lives depend.

The invasion of Russia 16 months ago has a dramatic impact on all of our lives.

It’s one of the reasons why British consumers are paying 40 percent more for pasta and suffering a cost-of-living crisis and rising mortgage bills.

The way Western economies have had to radically reform their energy policies despite Russia’s oil and gas cutoff has been a major blow to prosperity.

Fiscal policies, already thrown off course by Covid, took a huge hit as domestic energy prices were frozen and some costs shifted from consumers to government.

Passing on higher energy prices to businesses is one of the most critical factors behind the increase in the prices of goods and services.

Many companies used energy cost coverage to reap stronger profit margins after the impact of the pandemic.

Needless to say, wage settlements have exploded in both the private and public sectors, with average wages rising 7.6 percent in the three months to April.

Uncertainty about what is happening in Russia and Ukraine can only add to a deep-seated shock that is changing the face of the Western world.

The eurozone has been pushed into recession and should ultimately foot a large share of the bill for rebuilding Ukraine’s economy.

In Britain, homeowners worried about rapidly rising mortgage payments might consider that some of this is due to the geopolitical fallout of Vladimir Putin’s ill-conceived invasion.

The central bankers’ club, the Basel-based Bank for International Settlements, rarely speaks out. So if so, it’s worth a listen.

It warns that an ‘inflationary psychology’ is threatening to take hold in Western democracies and that the global economy is at a critical juncture.

Top official Agustin Carstens is calling for an end to monetary generosity and tough steps to reduce budget deficits and debt. The drama of the weekend in the steppes could, at best, bring an end to the war between Ukraine and Russia.

A more likely outcome is that it will bring fresh uncertainty to the UK and Europe – and exacerbate the struggle to restore price stability.

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Cineworld queen Mooky Greidinger’s ambition to create a British film powerhouse that spanned the globe was to be admired.

But the acquisition of the Regal chain in the US for £2.1 billion in 2017 was a step too far.

Not only did it add up to £7bn of net debt, but it also failed to anticipate how technology and consumer tastes were transforming entertainment.

Netflix and the rise of streaming have been a huge blow to moviegoing, and Hollywood is running out of ideas.

Almost all blockbusters have become derivatives of Marvel and other comics I once enjoyed as a schoolboy.

The pandemic ushered in the era of couch binge-watching. Business class seats, cocktails and finger food in cinemas were not enough.

Now Cineworld is in administration on both sides of the Atlantic. Britain’s 128 cinemas will remain open for now, but for how long?

As a recent visitor to Washington DC, it was sad to see that so many of the great picture houses, once visited, were shuttered building sites.

As for Mooky and his family, dreams of riches beyond stinginess may be gone.

For some inexplicable reason, the US Bankruptcy Court decided that they deserved a £27.5 million payout for their trouble.

Not a good sight for wiped-out shareholders and employees wondering where the next paycheck will come from.