{
  "id": 6889173,
  "title": "The Last Cut Is the Deepest",
  "url": "https://urgent.news/2026/09/12/the-last-cut-is-the-deepest",
  "topic": "world",
  "section": "World",
  "published": "2026-09-12T07:45:49.000Z",
  "source": {
    "name": "Riddle Russia",
    "slug": "riddle-russia",
    "url": "https://ridl.io/the-last-cut-is-the-deepest/"
  },
  "original_language": "en",
  "account": "Elvira Nabiullina's decision to keep the key rate at 14% on September 11 marked a small win in her monetary policy battle with the Presidential Administration and big business. Ukraine's attacks on refineries and ongoing fuel shortages have proven to be pro-inflationary, alongside the US-Iran war. Oil and refined-products markets reacted negatively last week, with reports of the Houthis seizing Mayun Island in the Bab el-Mandeb Strait and a strike on Saudi Arabia's East-West Pipeline. Holding the rate offered little insight into officials' ability to curb prices; it was more of a defensive posture to prevent further damage to investment without triggering a new inflation wave, which would be tough to tame.\n\nFormer economy minister Andrei Nechaev said the economy would \"flounder in a swamp,\" citing factors like labor shortages, high interest rates, and the overall deformed Russian economy. Investment-led growth is competing with consumption in wartime, with military spending accounting for over half of annual revenue in the second quarter. Private sector businesses and households, facing hard budget constraints, are bearing the adjustment costs of a military sector that is not performing well. Despite the surge in IT investment since the war began, there has been no improvement in labor productivity trends. High public-sector spending created demands that the economy was unprepared for, leading to increased labor costs and bonuses. Military spending is at record highs and may be underreported due to state-enterprise procurements, loan subsidies, and the National Welfare Fund backing wartime industries. The labor associated with this investment is also inefficient. Moreover, economists both abroad and inside Russia question the accuracy of Rosstat's industrial-output data, suggesting the investment in defense manufacturing is extremely inefficient. The Ukrainian war has made capital too expensive for businesses to act on their own. Nabiullina's refusal to cut rates shows that the faction advocating for price stability as the main path to lower rates is still victorious.",
  "summary": "Nicholas Trickett’s economic summary of the week (September 7 — 12)",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}