Russia is set to increase its spending on defence by 25% in 2025, the highest since the cold war, as Vladimir Putin vows to continue his war efforts in Ukraine and further escalate his standoff with the west.

The latest planned increase in spending will take Russia’s defence budget to a record 13.5tn rubles (£109bn) in 2025, according to draft budget documents published on Monday on the parliament’s website. That is about 3tn rubles more than was set aside for defence this year, which was the previous record.

Taken together, spending on defence and security will account for about 40% of Russia’s total government spending – or 41.5tn rubles in 2025.

The 2025 budget suggests that Putin has embraced what economists have dubbed “military Keynesianism”, marked by a significant rise in military spending, which has fuelled the war in Ukraine, spurred a consumer spending boom and driven up inflation.