This week we take a look at sticky inflation. Here in London the picture is especially grim: annual inflation remains above 8%, mortgage rates are surging and rents are rising at the fastest pace in years. The Bank of England, which has until now been too cautious, raised interest rates by half a percentage point on June 22nd, more than markets expected. But it’s not just Britain that is struggling—inflation in much of the West is proving far stickier than central banks would like. Underlying inflation has barely budged in America and the euro area. History suggests that bringing it down will be costly, leaving central banks an agonising choice. They might choose to tolerate higher inflation instead of pursuing their 2% targets. As our briefing explains, that would cause reverberations across markets. And, as our leader argues, by affecting wages, prices and retirement benefits, it could mean upheaval and uncertainty for workers, bosses and pensioners. Inflation is a problem far and wide. But to mark just how acute Britain’s woes are, our cover in Britain shows a melting, sticky £5-note ice lolly—everywhere else it’s a $1 bill. 

Our other cover this week looks at Ukraine’s war away from the battlefield. While its armies are attacking the Russians’ deep defences, Ukraine is also figuring out what kind of country it will be when the fighting stops. A conference in London set out to galvanise support from development banks and Western backers. This side to the war—the home front—is less dramatic, but everything depends on it. If Ukraine ends up prosperous, democratic and secure, then Vladimir Putin’s war will have failed. By contrast, if Ukraine takes back territory only to sink into a morass of corruption, poverty and political violence, it will have surrendered the ideals for which its citizens have fought so bravely. It is a fearsome agenda. What will Ukraine 2.0 look like?