Vladimir Putin’s invasion of Ukraine just broke yet another wartime record, according to UK intelligence.
While the Russian president is driving his troops forward into Ukraine at their fastest rate since the war began, there’s no doubt it is hitting Moscow’s economy hard.
Interest rates are now at the highest level they have been since the war began, at 21%, the UK’s ministry of defence (MoD) has said, as Moscow struggles to control its soaring inflation.
The UK officials explained: “Businesses and consumers are paying the price for the Kremlin’s costly invasion of Ukraine.”
Almost three years into the war, inflation is now at 8.5% in Russia.
That’s more than double the Russian central bank target and on par with the current rate in Ukraine.
To make matters even worse for Putin, the MoD previously estimated that Russia’s annual average inflation rate for the year will be around 7.9% – while Ukraine’s is expected to come in at 5.8% for 2024.
In its latest update on X, the MoD claimed: “Russia is becoming a bad place for business.
“Fewer firms are investing in Russia thanks to sky-high interest rates and escalating prices.”
The UK intelligence officials also noted that this will be trickling down to the general public.
The MoD said: “As war costs soar, civilian industries are struggling for workers and are likely raising prices.”
It added: “This means the cost of investing in Russia is becoming ever more expensive.
“Russia’s war against Ukraine is hurting the foundations of its economy.”
Despite these pressures, the Russian president still intends to push national defence up by 25% for 2025, taking it to 6.3% of gross domestic product, according to draft budget documents reported by Reuters last month.
It means defence spending will be at 13.5 trillion roubles (£108 billion) next year, and account for 32% of the total budget – a post Cold-War high.
But it’s not just the economic consequences Putin has to grapple with right now, either.
The MoD also shared reports of Russian soldiers rioting over inadequate medical care earlier this week.
Troops allegedly refused to return to the frontline they received better treatment.
Tensions are escalating between Moscow and the west, too, after the UK and the US gave Kyiv permission to use their long-range missiles to strike at targets within Russia.
Putin subsequently lowered Russia’s threshold for using nuclear weapons and threatened to strike the UK.