Britain will stop Russia selling sovereign debt in London after President Vladimir Putin deployed military forces into two breakaway regions of eastern Ukraine, Foreign Secretary Liz Truss said on Wednesday.
"We've been very clear that we're going to limit Russian access to British markets," Truss told Sky. "We're going to stop the Russian government with raising sovereign debt in the United Kingdom."
"There will be even more tough sanctions on key oligarchs, on key organisations in Russia, limiting Russia's access to the financial markets, if there is a full scale invasion of Ukraine," Truss said.
To limit sovereign debt sales in London, Britain would need additional legislation, according to Western officials. Clearing transactions would also be affected.
Putin on Monday recognised two Russian-backed regions in Ukraine after a lengthy televised address to the nation in which he delved as far back as the 17th Century to justify his belief that modern Ukraine was created by Vladimir Lenin's revolutionary government after the 1917 revolutions.
Western intelligence agencies are trying to work out if Putin's plan is merely to formalise control over the two rebel regions or use them as the first part of a much larger annexation of Ukraine.
Truss said it was highly likely Putin's plans involved a move on Ukrainian capital Kyiv.
Russia denies it plans to invade and says the West is gripped by anti-Russian hysteria and has repeatedly failed to take into account Russian interests since the 1991 fall of the Soviet Union.
Britain on Tuesday imposed sanctions on Gennady Timchenko and two other billionaires with close links to Putin.
British Prime Minister Boris Johnson said Russia was heading towards "pariah status" and that the world must now brace for the next stage of Putin's plan, saying that the Kremlin was laying the ground for a full-scale invasion of Ukraine.
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