Vladimir Putin likes good statistics. At a government meeting on 15 April, even as he acknowledged that growth was slowing, he pointed proudly to Russia’s unemployment rate: 2.1 per cent, a record low. Proof, he suggested, that the economy remains fundamentally sound despite everything the West has thrown at it. The Russian president would do better to worry.

A record low unemployment rate is not, in normal circumstances, cause for alarm. In Russia’s case it signals something closer to a slow-motion emergency. For the first time in its post-Soviet history, Russia has run out of workers.

The governor of Russia’s Central Bank Elvira Nabiullina said as much the day after Putin’s televised boast, telling the Moscow Exchange that labour shortages were the primary driver of the economy’s persistent overheating. Companies competing for a shrinking pool of workers are bidding up wages without any corresponding rise in output. Prices are following. To contain inflation – running at around 6 per cent – the Central Bank has had to hold its key rate at 14.5 per cent, more than twice the rate of inflation, to keep the price pressure at bay. That is........

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