UK prepares to shut Russia out of City of London

Boris Johnson says 'very, very tough' sanctions would bar Russian companies from financial markets

London's financial markets could be closed to Russian businesses. EPA

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Russian companies will be barred from raising money in the City of London if the Kremlin orders an attack on Ukraine, UK Prime Minister Boris Johnson has said.

Mr Johnson said a ban from financial markets would be a “very, very tough sanction” on Russian businesses and come as part of a wider package of penalties.

The warning to Moscow came as Britain separately announced it was scrapping a so-called golden visa for wealthy investors, in a move seen as targeting Russian oligarchs in the UK.

Diplomats from Britain, the EU and the US have been preparing a sanctions package that, they say, would inflict severe costs on Russia if it starts a war in Europe.

Britain has gone further than some allies in outlining what these would look like, with a change in the law last week teeing up measures against Kremlin-linked businesses and those deemed strategically important to Russia.

The UK has long been accused of turning a blind eye to dirty Russian money that arrived in London after the fall of the Soviet Union.

Asked on Thursday if a crackdown on Russian money was coming, Mr Johnson said: “Clearly, it’s time to bring in some tough sanctions against the Russian regime, against big Russian companies.

“And also making sure that we stop the raising of funds by Russian companies on London financial markets – that’s a very, very tough sanction that we’ll be bringing in.”

Mr Johnson, who did not give further details on this threat, also called for Europe to reduce its reliance on the Russian gas imports hanging uncomfortably over the crisis.

The US and Britain said the Nord Stream 2 gas pipeline from Russia to Germany would not open if there is an invasion, but the government in Berlin has not committed on this point.

“We can’t be blackmailed this way by Vladimir Putin,” said Mr Johnson as he inspected surveillance aircraft tasked with carrying out reconnaissance over Ukraine.

Russia, in turn, has threatened to retaliate if Britain brings in new sanctions. It is already under western sanctions linked to the annexation of Crimea in 2014 and other disagreements.

Mr Johnson said the picture in Ukraine was “very grim” and accused Russia of feigning provocations that could be a pretext for a military intervention.

It came after Nato countries poured cold water on Russia’s claims it was bringing some troops back to base after they finished military drills.