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March 4, 2022

The surging cost of metals such as aluminium and copper amid the Ukraine conflict means UK shoppers are likely to face higher prices, the head of the London Metals Exchange has said.

Matthew Chamberlain told the BBC's Today programme that prices for canned goods and copper wiring may rise.

One economist warned that inflation, a measure of price rises, may hit 10%.

Copper prices are at five-year highs, and other commodities have jumped in price since the Ukraine conflict began.

These higher prices are set to trickle down to UK shoppers, Mr Chamberlain told the BBC's Today programme.

"We've seen aluminium and nickel up 30% since the beginning of the year, and that will ultimately be passed on to consumers when you buy your drinks can made of aluminium, or when you make renovations to your house and you need copper for your wiring, all of those prices do go into the overall inflationary pressure."

Panmure Gordon economist Simon French told the BBC that the UK's inflation rate could now hit 10% because of higher costs, and on Thursday an industry body warned that UK household energy bills could reach as high as £3,000 a year.

This week, the price of Brent crude - the global oil benchmark - surged to more than $119 a barrel at one point, the highest since May 2012. On Friday, it was trading at around $111 a barrel.

The cost of natural gas and coal have also jumped on global markets.

Soaring wholesale energy prices have pushed the average cost of petrol and diesel on UK forecourts to record highs.

Share slide
On Friday share prices in Europe followed Asia lower, with London's FTSE 100 share index down 2.6% and France's Cac 40 down 3.2%, after a fire broke out at the Zaporizhzhia nuclear power plant in Ukraine, the largest in Europe.

Japan's Nikkei index closed down 2.2%, while the Hang Seng in Hong Kong closed down 2.6%.

The fire happened after Russia troops shelled the plant. Some investor concerns were eased after officials said the plant's safety was "secured".

The International Atomic Energy Agency (IAEA) later said that it had spoken to Ukraine's leadership and had been told important equipment at the plant was still working.

The shelling has drawn international condemnation, with the US President Joe Biden joining Ukrainian President Volodymyr Zelensky in urging Russia to cease the shelling and allow firefighters to access the site.

In recent days, Russia's invasion of Ukraine has sent shockwaves through the global financial and energy markets, as investors try to understand the implications of sanctions and supply chain disruptions.

The price of gold, which is regarded as a safer asset in times of uncertainty, has increased by 7.3% in a month to $1,938 per ounce.

The Russian rouble has hit a record low against the US dollar as countries around the world impose tough sanctions on the country.

Meanwhile, more British executives are bowing to pressure to quit Russian companies.

James Rutherford on Thursday became the latest UK national to step down from a Russian company's board, resigning from the Roman Abramovich-backed steel firm Evraz.

It came after the business group the Institute of Directors called on Britons to resign from the boards of Russian companies, due to the invasion of Ukraine.