London Daily

Focus on the big picture.
Thursday, Oct 22, 2026

West must hit Russian economy even harder, says Liz Truss

West must hit Russian economy even harder, says Liz Truss

UK foreign secretary reveals Moscow now cannot access 60% of foreign currency reserves
The west has frozen more than $350bn (£266bn) of Russia’s $604bn foreign currency reserves, Liz Truss said on Tuesday.

Britain’s foreign secretary revealed on the second day of her visit to Warsaw that 60% of Moscow’s reserves were now unavailable to it, slightly higher than recent calculations. It follows US Treasury moves on Monday to make it harder for Russia to pay back its dollar-denominated debt.

But Truss, speaking alongside the Polish foreign minister, Zbigniew Rau, said the west urgently needed to go further and faster to damage the Russian economy, saying: “The only way to end this war is for Vladimir Putin to lose in Ukraine.”

She warned: “Although Russian troops have been defeated in their initial assault on Kyiv, there has been no change in their intent and ambition. We are seeing Putin’s forces set their sights on the east and south of Ukraine, with the same reckless disregard for civilian lives and their nationhood.”

Poland is probably the UK’s closest European ally in the war with Ukraine, and on her two-day visit Truss met the Polish prime minister, Mateusz Morawiecki. On Monday he criticised the French president, Emmanuel Macron, for talking to Putin, saying no one talked to Hitler. Truss has increasingly been setting a high bar for the lifting of the west’s sanctions on Russia, a move that is welcomed in Poland.

In the wake of alleged Russian war crimes, the UK has joined Poland and Ukraine in pressing the G7 – including Germany, France and Italy – to set out specific timetables to end their dependency on oil, gas and coal.

It is expected that the EU will be willing to take measures on coal and oil but not gas, since the infrastructure is not in place to end the dependency on Russian gas imports.

One-third of Russia’s coal exports were sent to OECD Europe. Germany, the Netherlands, Turkey and Poland combined received 24% of all Russia’s coal exports in 2021. Since February the EU has spent €710m (£592m) on Russian coal, €9.6bn on Russian gas and €8.8bn on Russian oil, according to the pressure group Europe Beyond Coal.

Truss claimed coordinated sanctions were “pushing the Russian economy back into the Soviet era” and were having a crippling impact on those who feed and fund Putin’s war machine.

But speaking before a meeting of EU, G7 and Nato foreign ministers in Brussels this week, she said the west needed to go further by taking four additional steps. These were banning Russian ships from ports, cracking down on Russian banks, “[going] after industries that are filling Putin’s war machine, like gold”, and agreeing a clear timetable to eliminate imports of Russian gas and oil.

The US and UK have already barred all transactions with the Russian central bank’s gold reserves, valued at roughly $130bn.

The claim by Truss that 60% of Russia’s central bank reserves were beyond its reach shows the success and limits of the west’s sanctions regime. At one level the west can claim progress. For instance, Russia’s central bank announced last week that its foreign currency and gold reserves had fallen since February and the start of the war by $38.8bn, to $604.4bn as of 25 March.

On this basis it would take less than a year for Russia to run out of the remaining foreign currency reserves that it can access. But in practice Russia is using funds generated through European purchases of Russian gas funnelled through Gazprombank to generate foreign currency with which to defend the ruble.

At the outset of the crisis, in a surprisingly bold move, Japan, the UK, France, Germany and the US all froze Russian assets, making it impossible for Russia to sell the reserves for rubles. But Russia had sought to protect itself by pursuing a policy of building its foreign currency reserves and gold, resulting in it lifting its reserves from $368bn seven years ago to more than $630bn.

Figures from 2021 show about 13% of its assets were stored with China, part of a conscious move by Russia to pull its reserves out of the west.

Until this week the US had been allowing Russia to use its frozen funds to make coupon payments on dollar-denominated debt on a case-by-case basis. But on Monday for the first time it prevented Russia from paying for a $552.4m principal payment on a maturing bond, saying it could not access its frozen funds.

The Bank of Russia has responded to the west’s sanctions by doubling interest rates to 20% and by demanding unfriendly countries pay for their gas supplies in rubles.
Newsletter

Related Articles

0:00
0:00
Close
Parliamentary Inquiry Highlights Urgent Need to Address Housing Shortage as Scottish Completions Hit Eleven-Year Low
United Kingdom and Singapore Sign Comprehensive Financial Agreement to Deepen Digital and Sustainable Market Ties
Greggs Announces Plan to Close Four Manufacturing Facilities and Cut Seven Hundred and Forty Jobs
International Monetary Fund Raises United Kingdom Economic Growth Forecast While Warning of Inflationary Pressures
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs Onto Gas to Lower Household Bills
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
×