IGNORING THE MOST IMPORTANT COLLAPSE:

The west knows all about the vulnerability of Russia's economy, its creaking factories and its over-reliance on the energy sector. When the introduction of sanctions over Russia's support for the separatists in Ukraine failed to bring Vladimir Putin to heel, the US and Saudi Arabia decided to hurt Russia by driving down oil prices. Both countries will face some collateral damage as a result - and this could be considerable in the case of the US shale sector - but both were prepared to take the risk on the grounds that Russia would suffer much more pain. This has proved to be true.

Now for the good (or perhaps less bad) news. Eventually, lower oil prices mean stronger global growth, because consumers will have more money to spend and businesses will have more spare cash to invest. At that point, the price of oil will rise and the rouble with it.

Even so, Russia looks vulnerable. It has reached the end of the road with interest rate increases and has only two options: to allow the rouble to find its own level, in the hope that declining oil prices will prove temporary or to introduce capital controls. These are seen very much as a last resort by Moscow, but may prove necessary if the rouble rout continues.

The phrase "perfect storm" is over-used, but the combination of a collapsing currency, a collapsing economy and punitive interest rates make it apposite.

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