Vladimir Putin signalled he is not willing to sign a peace deal on Ukraine-at least not on current terms-after five hours of talks in Moscow that involved US envoy Steve Witkoff and Donald Trump’s adviser Jared Kushner. Kremlin foreign policy aide Yuri Ushakov said no compromise had been found, resetting expectations for both diplomacy and markets.

For investors, the message is that policy risk remains elevated and prolonged. In recent days Putin has branded Kyiv’s leadership a “thieving junta”, accused European leaders of trying to sabotage peace efforts, and insisted Russia holds the initiative on the battlefield. Ukrainian officials and many international observers dispute those claims, but the communications strategy is designed to project momentum and staying power.

Nearly four years on from the full‑scale invasion of February 2022, the Russian president continues to present himself as a leader who will not change course. State TV has shown him in military fatigues studying frontline maps and touting gains. The signal to European capitals, Washington and Kyiv is that external pressure-or a single summit-will not produce a pivot.

That posture meets an unavoidable constraint: money. Wars require sustained financing. Despite extensive sanctions, the Russian state is still funding its campaign, but strains are building. Oil and gas revenues have softened and the federal budget deficit has widened. Putin himself has acknowledged “imbalances” and noted that output in several sectors has fallen this year, adding, “Are we satisfied with such trends? No.”

Lower energy takings tighten fiscal space just as military spending becomes more permanent. For oil markets that means two opposing forces: Moscow needs to move barrels to fund the war, yet enforcement efforts and shipping frictions can interrupt flows. The result has been periodic risk premia rather than a clean price trend-precisely the type of volatility that complicates hedging for UK importers.

Gas is the other pressure point. European storage helps, but prices still react to headlines around Russian supply, shipping or infrastructure. For UK households and SMEs, wholesale swings can feed through to bills with a lag, especially for firms rolling off fixed‑price contracts this winter. The policy backdrop-from Ofgem guidance to Treasury support-cushions, but does not remove, exposure.

Sanctions also bite through compliance costs. Each tightening round adds checks for banks, insurers and logistics providers, raising the frictional cost of legitimate trade even when goods have no Russian link. UK SMEs should keep screening tools current, probe for indirect counterparties, and make sure trade finance documentation is watertight to avoid delays and unexpected fees.

Currencies and rates reflect the geopolitical pulse. Risk setbacks tend to lift the US dollar and high‑grade sovereigns, moves that can pressure sterling while pulling gilt yields lower. UK exporters with dollar receivables and importers paying in dollars may want to revisit hedge ratios; boards should align cover with cash‑flow timing rather than headlines.

What could change the Kremlin’s battlefield calculus is not a single meeting but the durability of funding. A deeper slide in energy receipts, wider discounts on Russian exports or further domestic production slippage would tighten the budget. Tougher enforcement on shipping and shadow finance would add to the squeeze. None of this, however, provides a near‑term timetable for de‑escalation.

The working assumption for UK readers should be a drawn‑out conflict with intermittent price spikes. Watch Russia’s monthly budget updates, reported oil and gas revenues, and signals on sanctions enforcement. Until the money question bites harder in Moscow-or terms emerge that the Kremlin can accept-the base case is prolonged uncertainty and periodic market flares.