Europe is heavily reliant on imports of oil and gas and in particular from Russia, leaving it vulnerable to the current flare-up in tensions over Ukraine.

Around 40pc of its gas imports come from Russia while Moscow is trying to tighten its grip on supply with the Nord Stream 2 pipeline. However, gas prices cooled on Tuesday after geopolitical tensions were eased by Russia returning some of its troops to their bases.

It came as the ECB drew up grim scenarios revealing the economic blow the region faces if its gas supplies are curbed by a Russian invasion of Ukraine.

The ECB warned a 10pc plunge to eurozone’s gas supply would reduce economic output by 0.7pc – equivalent to an £84bn hit, based on 2019 GDP figures. Austria, Greece and Italy are expected to suffer a larger than average impact from gas supply woes while the mining, paper and chemicals industries were the worst affected.

Vanessa Gunnella at the ECB said: “The euro area is heavily dependent on imports of both petroleum-based energy products and natural gas.

“Higher gas – and electricity – prices reduce households’ real disposable income and purchasing power… and thus private consumption.”

Eurozone households are suffering their biggest inflation squeeze on record after prices rose by 5.1pc in January compared to a year earlier.

The surge is piling pressure on the ECB and Ms Lagarde to more aggressively fight inflation by lifting interest rates, which are still deep in negative territory.

The Bank of England has already lifted interest rates twice in three months in response to inflation.

While the ECB attempted to talk down investor expectations for rising borrowing costs at its meeting earlier this month, markets expect it to tighten policy to some extent this year.