Vladimir Putin’s war on Ukraine is putting Russia’s economy under “considerable strain”, as Moscow grapples with surging inflation, a tumbling rouble and a ballooning defence budget, a new US briefing claims.

As a result of the war and sanctions imposed by the West, the Russian economy is now 5pc smaller than it otherwise would have been, the assessment argues.

According to a draft statement prepared by the US Treasury, reported by the Financial Times, Moscow is now being forced to spend more than $100bn (£79bn) on defence - about one third of all government expenditure.

At the same time, the stretched budget is forcing it to hold down public sector pay increases at a time when inflation is still running at 7.5pc.

The labour market is also extremely tight because of the number of Russians who have been sent to war.

It is thought to be the most comprehensive assessment of the damage done by the war and western sanctions to Russia’s economy so far and comes as some US lawmakers are wavering in their support for sending aid to Ukraine. 

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