LONDON, March 20 — British finance minister Rishi Sunak, preparing for a budget update this week, said he would help where possible with a cost-of-living squeeze but warned tough economic times would be exacerbated by the Ukraine crisis and sanctions on Russia.

Britain and its allies have put sanctions on Russia and energy prices have jumped following the invasion of Ukraine, intensifying a surge in inflation pressures and making the leap in the cost of living even more acute.

"The actions and steps we’re taking to sanction Russia are not cost-free for us here at home,” Sunak told Sky News today, ahead of his Spring Statement on Wednesday.

"I can’t pretend that it’s going to be easy, that government can solve every challenge, or that I can completely protect people against some of the difficult times ahead, but what I can say is where we can make a difference, of course we will.”

Sunak said that he understood the impact of inflation — which is heading for 8 per cent — including rising fuel prices, but added that to cut value-added tax on fuel would be the opposite of targeting support for those facing the biggest squeeze.

He said his priority going forward was to reduce taxation but a planned rise in national insurance due to begin in April, in order to fund health and social care spending, was fair.

Asked whether there was a risk of recession due to the Ukraine crisis, Sunak said he would not speculate.

"What I would say to people is they should feel confident about the strength of our economy,” he said. "But the outlook is uncertain... because of what’s happening in Ukraine.” — Reuters