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The death of Queen Elizabeth II and the period of national mourning that followed have been the latest blow to Britain’s already struggling economy, but economists and analysts say that there are glimmers of hope.

Britain is at a watershed moment. The country has just completed a 10-day period of mourning, concluding with country-wide shutdowns during a public holiday to mark the late monarch’s funeral. Her death came just two days after a new Prime Minister, Liz Truss, took office, after Boris Johnson was ousted by his own party amid a series of ethics scandals, while the U.K. faces a cost-of-living crisis unlike anything the nation has seen in decades.

Inflation has soared to the highest levels since the 1980s, at around 10%, and the nation faces an energy crisis in large part over dwindling Russian energy exports to Europe. The British pound has also been languishing around a nearly 37-year low against the U.S. dollar. And economic growth is another concern—the U.K. has now fallen behind India, becoming the world’s sixth-largest economy. The U.K.’s central bank, the Bank of England, has warned that it risks falling into a recession that could last well into 2024.

While the monarchy is often viewed as an anachronism, it is still an important part of U.K. life. It’s likely that sentiment will continue under the new monarch, King Charles III, who acceded when the Queen passed.

“It really does feel like we’ve entered into a new era for the U.K. as a whole,” says Craig Erlam, a senior market analyst at multi-asset broker OANDA. “That makes for a very interesting time for the country and its place in the world.”

Putin’s war sets Russian economy back 4 years in single quarter

A wave of international sanctions after Moscow’s invasion of Ukraine disrupted Russia’s trade and threw various of its industries into paralysis.

President Vladimir Putin’s invasion of Ukraine set Russia’s economy back four years in the first full quarter after the attack, putting it on track for one of the longest downturns on record even if less sharply than initially feared.

In a bleak tally of the war for Russia, an economy that was picking up speed at the start of 2022 swung into a contraction during the second quarter. Data on Friday showed gross domestic product shrank for the first time in over a year but fared better than forecast, dropping an annual 4%.

Considering the lost output, GDP is now roughly equivalent to its size in 2018, according to Bloomberg Economics. The jolt of international sanctions over the war disrupted trade and threw industries like car manufacturing into paralysis while consumer spending seized up. Although the economy’s decline so far isn’t as precipitous as first anticipated, the central bank projects the slump will worsen in the quarters ahead, reaching its lowest point in the first half of next year.

“The economy will move toward a new long-term equilibrium,” Bank of Russia Deputy Governor Alexey Zabotkin said at a briefing in Moscow. “As the economy undergoes a restructuring, its growth will resume.”

The Bank of Russia acted to contain the upheaval in markets and the ruble with capital controls and steep hikes to interest rates. Enough calm has returned to roll back many of those measures.

Fiscal stimulus and repeated rounds of monetary easing in recent months have also started to kick in, blunting the impact of international sanctions. Oil extraction has been recovering and spending by households showed signs of stabilization.

“The crisis is moving along a very smooth trajectory,” said Evgeny Suvorov, lead Russia economist at CentroCredit Bank. On Friday, the central bank published a draft of its policy outlook for the next three years, predicting the economy will take until 2025 to return to its potential growth rate of 1.5%-2.5%. The bank’s projections for 2022-2024 remained unchanged, with GDP forecast to shrink 4%-6% and 1%-4% this year and next, respectively.