Within a week of coming to power, Starmer committed to stand with Ukraine, for as long as it takes. As part of that he then committed to new package of artillery and brimstone missiles to be delivered shortly, as well as placing a new order for soviet era ammunition, to help bolster Ukraine’s defences. Hence, the bounce seen across the UK economy in July, was most pronounced in Aerospace & Defence, with vacancies rising month to month by over 40%, and hitting levels last seen in November last year.

Looking ahead, the immediate concern facing policy makers regarding their domestic politics, will be the impact of the war on energy prices this winter and the inflationary impact of this. With that in mind, the UK has since 2022 reopened and doubled gas storage in the Rough facility and has taken several other steps, to ensure that come winter, we don’t see the surge in pricing that happened before.

Otherwise, the question which will start to come up more and more, is how long the war will go on for. Nonetheless, having spent the last three weeks in Ukraine, working with the Vacancysoft team in Lviv, (which is on the Polish border) it is fair to say the recent incursion into Kursk could act to shorten the war significantly, as it will give the Ukrainian Government real leverage in any future negotiations.

However, before there can be a peace deal, Ukraine must first win back Crimea. The peninsula is of significant strategic importance, mainly because of the gas reserves found around the coast line. In fact, when the geological studies were done in 2012, and gas was first discovered to be present, it was estimated that Crimea had 80% of the reserves Norway did, when gas was first discovered there. It is not a surprise therefore, that Russia invaded and took control at the first possible opportunity, after all, they could not risk Ukraine becoming a competitor to their monopoly into Europe, and Germany in particular.

Now with this war in full swing, Nord 2 having been destroyed and the German economy probably in recession in part because of the higher cost of energy impacting industrial costs, the need for a free, independent Ukraine, integrated into the EU and protected by NATO, with control over the Crimean Gas fields becomes paramount, particularly for the Germans. Hence why when one analyses behind the scenes, after the USA, Germany has been by far the biggest contributor. (As of the end of 2023, the US had contributed US 43 BN in aid, Germany US 16 BN, UK 12 BN, France 500 MN. The difference between rhetoric and reality is stark, especially when it comes to France. That to one side.)

Realistically though, for people in the West, given the news on Ukraine has dropped off the main headlines, how best to understand what is happening? Well, start by putting aside the landwar, what we can see is the following:

• Finance
  The war started, and Russia thought it had almost unlimited reserves, whilst Ukraine was significantly limited by comparison. In contrast, now what we see is that the combination of sanctions and assets being frozen, mean the Russian Bank Governor recently announced, the Government have enough funds to maintain their budget shortfalls for at most another 18 months. In contrast, with Ukraine, despite them recording significant deficits, those are being met by a variety of mechanisms. The slowdown in the Chinese economy is acting to dampen oil prices, and as a result, Russia is being forced to increase tax, and reduce spending elsewhere, which is increasing societal discontent. Even then, that is not enough to balance the budget – and strikes on refineries are only making the problem worse.
• Air
  Ukraine famously began with their social media campaign, of protect the sky’s. Now their sky’s are becoming protected. 10 F16s have been sent already and shortly they will have 80 or more. At this point, any advantage the Russians had will be neutralized and the Ukrainians should be able to eliminate any missile strikes with air to air engagement.
• Navy
  Russia had a navy in the black sea, based in Crimea. Ukraine had none. The Turks then famously refused to allow the Russians to reinforce their Black sea navy, and the Ukrainians started targeting what they did have. Now the Russian Navy in the Black sea is gone in all but name, and increasingly the use of UAVs is giving Ukraine control of the seas, to the point where despite the Russians refusing to sign an extension to the grain shipping deal, it has not mattered.
• Manufacturing, Technology & R&D
  Russia started the war with significantly better manufacturing, hardware and equipment, now this has been inverted, thanks to a combination of Western support and Ukrainian ingenuity. Russian stockpiles are being depleted, whilst the west scales up manufacturing, within a year, the modelling shows this will be inverted, the invasion into Ukraine was spearheaded by Leopards and HIMARS regularly strike with precision accuracy. On top of that, Ukraine has become the global leader in military drone technology, with analysts from all over the world gawping, as helicopters are taken down mid flight, and aerodromes are struck thousands of miles from the border.
• Manpower
  Russia started the war with an overwhelming advantage here, but as the invasion into Kursk is showing, their cavalier attitude towards their own troops, and the resulting KIA/IIA stats, are meaning that the troops they have in reserve are limited, and they are stretched. This is in contrast to the Ukrainians who have worked hard to protect life, and conserve manpower. Even now, the Ukrainians are getting reinforcements, from men returning who are being trained in Poland. It is estimated the battalion being trained there by NATO instructors (constituting Ukrainians living across the EU) will be 5000 strong once deployed. In contrast, Putin conscripts teenagers.

So what does this mean in terms of the Land war?

Well the map doesn’t lie. Russia still has control of nearly 20% of the Ukrainian territory, and Crimea is still theirs also. Nonetheless, increasingly Crimea is becoming undefendable, and the signs are, the Ukrainians will take it back soon. When that happens, the land gains Ukraine are making in Kursk, form the perfect start point for negotiations around withdrawals and land swaps. Sounds simple to say, equally the POWs Ukraine is now taking, are the teenagers from families in Moscow and St Petersburgh, who were told they would never see or fight in the war. Now they are, have been captured and the families are raising the alarm. Moscow is losing control of the internal propaganda war, and Putin knows it.

What next? It remains a volatile situation, and the fact Russia has nuclear weapons will remain a concern. Nonetheless, the signs are that for the first time, Russia is clearly starting to lose. Whether Putin has the sense to negotiate a deal where he doesn’t get everything he wants, is the question. But his hope that a Trump win, may give him the ability to negotiate a preferential deal is dissipating by the day as Harris starts to take the lead in polling.

And for Ukraine? Within a year, expect them to be on a fast track to the EU, de facto NATO members, having control of Crimea and having mostly pushed Russia out of their land. The only question then is if Russia wants a deal, and with that the prospect of Sanctions to be removed, or to slowly become a much larger version of North Korea, with a permanent ceasefire in place.