The Russian rouble plunged to new lows on Friday, as the economy continues to struggle with high inflation and interest rates.

The Kremlin is growing increasingly nervous, as economic data points to a brewing financial crisis.

In the latest blow for Putin, the ruble continued its fall, and is now worth just one US cent and less than one pence in sterling.

Analysts from the Institute for the Study of War - a Washington based think tank - predicted "significant challenges" ahead for the Russian economy.

They noted the Kremlin had adopted policies to cut compensation payments to injured soldiers, combat inflation, and address low birth rates and labour shortages.

"The Kremlin's recent economic policies indicate that the Russian economy will likely face significant challenges in 2025 and that Russian President Vladimir Putin is worried about Russia's economic stability in the long term," the analysts said.

"The Kremlin recently adopted several policies that aim to cut Russian government spending on wounded Russian servicemen, combat inflation, and address long-term demographic problems such as low birth rates and labour shortages.

"These policies demonstrate that the Russian economy is not as resilient to Western sanctions, monetary constraints, and the cost of the war effort as the Russian government postures.

"They also demonstrate that the Kremlin will not be able to sustain the protracted war effort for years and decades to come while shielding Russian society from economic challenges."

Interest rates have reached a record high of 21%, as Russia's Central Bank struggles to curb inflation.

Currently hovering at 9.1%, the bank wants to bring inflation down to around 4% and has warned there could possibly be a further increase in the key interest rate.

High interests rates are placing huge debt burdens on over leveraged Russian firms, which are struggling to repay loans.

Bankruptcies in 2024 are up 20% on last year, with many more potentially in the pipeline.

A major property developer is reported to be on the brink of collapse, with its owner desperately trying to sell off his shares.

The Samolet Group of Companies employs 10,000 people and has offices in 300 cities across Russia.

The company has fallen victim to rising loan prices and a collapse in demand for mortgages.

In the third quarter, its sales plummeted by 44% in square metres and 37s% in money.

Samolet's bonds have been falling rapidly on the Moscow Exchange for several months.

Securities maturing in 2027 have lost 13% of their value since the end of August, half of which has been lost in the last two weeks.

They are trading at 83% of their face value, and their yield has soared to 36.3% per annum. The company's shares fell by 9% during trading on Thursday.