As prices surged in the West following Russia’s invasion of Ukraine, Vladimir Putin was confident enough about the health of his own economy to gloat.
The Russian leader said last summer that those who blamed his actions for inflation didn’t “know how to read or write”. Twelve months on and Putin may not be in the mood to thumb his nose at the US and Europe.
While inflation is now falling almost everywhere in the West, it is rising in Russia.
Officially, inflation in Russia is still well below its target rate. But last week the Russian Central Bank (RCB) raised the Bank Rate by a whole percentage point to 8.5pc, in a sign of growing unease about price rises.
It was the Bank’s first intervention in more than a year. Policymakers in Moscow explained their decision by warning that inflation was accelerating.
Pressure is building on multiple fronts: the rouble has plunged, driving up the cost of imports; a tight labour market is driving high wage growth; and government spending is further boosting demand just as sanctions are constraining supply.
