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Optimism that the global economy could be recovering from its pandemic-induced trauma is being severely tested by the unfolding Ukraine crisis.

Russia’s movement of troops into Ukraine’s separatist regions have triggered sanctions that are likely to exacerbate the existing problems of rising energy prices and inflationprompting sharp swings in share prices.

Advanced countries have the capacity to cope, the FT’s economics editor Chris Giles writesbut Russia’s actions increase uncertainty over when central banks should tighten monetary policy.

Meanwhile, the easing of pandemic restrictions in Europe, the US and elsewhere is raising business confidence, particularly in the travel and hospitality sector, although supply chain bottlenecks are frustrating the recovery for others.

Heathrow, the UK’s busiest airport, predicted a surge in travellers getting away this summer and chief executive John Holland-Kaye said a third runway was “back on the table” to capitalise on the airline industry’s emergence from the ravages of lockdown.

Equally bullish was InterContinental Hotels Group, the owner of the Holiday Inn and Crowne Plaza chains, which said business was “closer to pre-pandemic levels” in 2021.

Arundhati Bhattacharya, Salesforce’s India chief executive, said that her company was struggling to fill rolesas pandemic-fuelled demand for remote back office support had created skills shortages in the country.

The do-it-yourself frenzy brought on by the coronavirus pandemic has helped Home Depot. But despite resilient consumer demand, the Atlanta-based retailer warned yesterday that elevated supply chain costs would continue to weigh on profits in 2022.

The road to recovery was going to bumpy even before the Ukraine crisis erupted. Now the path forward has become even less certain.

Don’t miss our subscriber-only event “The Russia-Ukraine Conflict: What Next?” this Friday at 1pm GMT. Register free here for this unmissable virtual briefing, featuring Financial Times journalists and leading experts, including Arseniy Yatseniuk, the former prime minister of Ukraine, and Gideon Rachman, our chief foreign affairs commentator.

Latest news

• EU to hit Putin’s defence minister and chief of staff with sanctions

• Hong Kong to give out cash handouts as Covid cases hit record level

• Barclays’ quarterly profit surges as dealmaking boosts investment bank

For up-to-the-minute news updates, visit our live blog

Need to know: the economy

Imposing sanctions on Russia poses a threat to the global economy. But the cautious, narrowly targeted measures announced over the last 24 hours will have little impact on Moscow, which can absorb significant economic pain, according to the latest Trade Secrets column by the FT’s senior trade writer Alan Beattie. You can sign up for Alan’s weekly Trade Secrets newsletter here.

Latest for the UK and Europe

The IMF has urged Rishi Sunak to bring forward planned tax rises to limit the risk of persistently high inflation, even though it would tighten the financial squeeze on Britain’s households. The fund added that in the short term the Bank of England should not increase interest rates rapidly — a view shared by the BoE’s deputy governor — as this could risk tipping the economy into recession.

The UK government has also been criticised by a parliamentary committee for exposing taxpayers to “substantial, long-term financial risks” because of an estimated £15bn of Covid support lost to fraud and administrative errors. Future generations will be left to pay for these “unacceptable” sums that were “risked and lost” by ministers, according to the House of Commons public accounts committee report.

Global latest

Years of progress in tackling infectious diseases in the world’s poorest countries have been wiped out by the shift in resources to tackle the pandemic and subsequent disruption to treatments, experts have warned.

Many fear that the disruption to treatments caused by lockdowns and the loss of funding to Covid prevention strategies will mean that deaths from HIV, tuberculosis and malaria in some nations are now on track to exceed those caused by the pandemic so far. However, the picture is not entirely bleak, with new approaches developed during the pandemic proving their worth.

Need to know: business

Surging prices for raw materials enabled Rio Tinto to make the second-biggest payout in UK corporate history on the back of bumper results. Rio investors will receive a total of $16.8bn (£12.3bn) for the 2021 financial year.

Aston Martin narrowed its losses in 2021 as revenues climbed back above pre-pandemic levels, boosted by customer deposits for its high-price special cars and increased demand for its luxury sport utility vehicle.

HSBC reported buoyant fourth-quarter earnings yesterday, showing that the bank is recovering from the worst of the pandemic and is optimistic about growth, with interest rates set to rise. However, the London-listed lender set aside $451mn as it braced for more defaults in the troubled Chinese real estate sector and warned of a slowdown in wealth management because of Hong Kong’s restrictive “zero Covid” strategy.

The World of Work

The return to the office brings with it hidden dangers. One major — and much misunderstood — area of ??risk to all careers is the work social event, according to leadership and diversity consultant Nels Abbey, who offers tips for navigating the office party.

The return to the office also creates real legal concerns. Employers in England have warned that they will be flying blind from tomorrow when all pandemic restrictions end. The UK government has not issued new workplace safety guidance and is refusing to fund free workplace coronavirus testing beyond April 1.

Get the latest worldwide picture with our vaccine tracker

And finally . . .

The collapse of the blood-testing company Theranos and the conviction of its founder Elizabeth Holmes was hailed as both the end of tech’s “fake it till you make it” culture and of the dubious cultural phenomenon of the “girlboss”. But Elaine Moore, the San Francisco-based deputy head of Lex, finds that in her local start-up community there is no interest in learning lessons from the debacle.