European electricity prices have reached the highest sustained level on record, as Russia’s cuts to the continent’s gas supplies ripple through energy networks and threaten to cause lasting pain for industry and households.

German baseload power for delivery next year, the benchmark European price, hit its highest-ever level on Monday and surpassed the previous record set in December after gaining 13 per cent to trade at €325 per megawatt hour. The equivalent contract in France has doubled to €366 per MWh since the start of the year.

Power prices are heavily influenced by the cost of gas, which is used to generate electricity. In Europe, gas prices have rallied to their highest level in four months and have more than quadrupled since a year ago after Moscow deepened gas supply cuts to Europe.