Euro tumble to 20-year low against dollar over fears Putin will cut off gas

Lee Hardman, an analyst at MUFG, said that it is “only a matter of time” before one euro is worth less than one dollar, after the bloc’s currency tumbled more than 11pc against the greenback this year.

He said: “The main driver for euro weakness continues to be building concerns over greater disruption for European economies from tightening energy supplies.”

The euro has also been hit by a divergence in monetary policy as the US Federal Reserve races ahead of the European Central Bank (ECB) in raising interest rates. The ECB is expected to finally begin lifting interest rates out of negative territory next week but Mr Hardman warned that “worsening energy supply constraints” will make its task even harder.

Economists at Goldman Sachs said that Russian gas supplies to Europe falling to zero would be equivalent to a 35pc price shock to the Continent’s gas market, pushing bills up to €500 (£423) per month.

It came as analysts in the UK raised the prospect of monthly energy bills as high as £367 a month this winter, piling pressure on Britain’s next prime minister to provide more relief.

Analysis by Investec adjusted from seasonal consumption patterns predicted a surge which would push monthly payments to three or four times their typical figures.

Martin Young, his senior energy analyst, said it could prove to be “a truly devastating level for many.”

He said: “Government acted when cap estimates were around £500 lower. It will need to act again, in our opinion.”

The bank expects the industry watchdog Ofgem to increase the annual price cap to £3,285 in October – up two-thirds from its current level of £1,971 – and then to £3,359 in January.