Aluminium prices have surged by a record amount after Britain and the US banned the trade of Russian metals to “prevent the Kremlin funnelling more cash into its war machine”.

The price of aluminium at one point jumped by more than 9pc on the London Metal Exchange (LME) on Monday, which was the biggest rise seen since current trading began in 1987.

Nickel prices also leapt higher, climbing more than 8pc at peak.

The surges came after new US and UK sanctions over the weekend prompted the LME to stop trading new aluminium, copper and nickel produced by Russia.

Chancellor Jeremy Hunt said the ban would “prevent the Kremlin funnelling more cash into its war machine”.

Russia is a major metal producer, accounting for around 5pc of global aluminium supplies, 6pc of nickel and 4pc of copper.

Aluminium is a key component in a wide range of manufacturing, used in everything from car body panels to drinks cans and TVs. A sustained rise in the metal’s cost could therefore be a major inflation headache, threatening to push up a wide range of prices across the economy.

However, analysts at Goldman Sachs said the ban would be unlikely to threaten supply.

Analysts wrote in a note to clients: “Russian producers can continue to sell metal to non U.K./US markets – in this respect there is no immediate tightening implication or trade flow dislocation to Western markets from current structure.”

Both aluminium and nickel prices eased from early peaks as traders digested the announcements over the weekend.

However, contracts for delivery of aluminium in three months remained up 5.3pc at $2625 a tonne by 8am on Monday morning. Nickel was 3.9pc higher at $18,395 a tonne.

The price of copper was largely unmoved on the LME, reflecting the fact that supplies are more diversified and the price typically reflects sentiment about the global economy.