Ruble hits 15-month low as Ukraine ‘recaptures’ key territory following botched mutiny attempt

The Russian President’s position in the Kremlin looked more precarious than at any point since the invasion of Ukraine after 25,000 mercenary troops vowed to march on Moscow to topple the military's top brass.

Putin managed to quell Prigozhin’s potential onslaught with a deal brokered by Belarusian leader Alexander Lukashenko.

The currency recovered slightly on Tuesday morning.

Along with the ruble dropping against the world's major currencies, wheat futures rallied by as much as 3.2 per cent and European natural gas prices roses by as much as 14 per cent on Monday.

Highlighting the profound economic implications of the Wagner Group’s brief march on Moscow, Goldman Sachs analysts wrote: “The civil unrest in Russia over the weekend illustrates the fragility of the current Russian political situation, and the importance of understanding the risks to Russia supply associated with potential domestic upheaval.”

They added: “The fact that Putin invoked what happened during the Russian Revolution of 1917 in his address suggests that the perceived probability of significant domestic upheaval at some point has likely risen.”

Further financial pressure could be exerted on Russians if Putin decides to reinforce his ranks in a bid to bolster his position.

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Russia’s labour force has contracted by 1.5 per cent since Putin invaded Ukraine.

The Russian President admitted last month that the country “does not have enough workers” and the head of the country’s central bank suggested inflation could surge following Putin’s calls to enlist even more troops.

Elvira Nabiullina, chairwoman of the Bank of Russia, said earlier this month: “Labour shortages are increasing in many industries amid the effects of the partial mobilisation as growth in businesses’ demand for labour continues.

“Pro-inflationary risks from the labour market are intensifying.

"Significant labour shortages may lead to labour productivity growth lagging behind growth in real wages.”

However, Russia’s economic woes come at a time when Ukrainian forces have made significant inroads in Donetsk.

The ex-Soviet state’s airborne forces have made small advances east from the village of Krasnohorivka.

The area, which is just 20 miles away from Donetsk City, sits on the old Line of Control.

Addressing Putin’s latest battlefield setback, the UK’s Ministry of Defence (MoD) said: “This is one of the first instances since Russia’s February 2022 invasion that Ukrainian forces have highly likely recaptured an area of territory occupied by Russia since 2014.”

The MoD added: “Recent multiple concurrent Ukrainian assaults throughout the Donbas have likely overstretched Donetsk People’s Republic and Chechen forces operating in this area.”

Ukrainian President Volodymyr Zelensky also claimed a small victory in his late night address.

He said: "Today, in all sectors, our soldiers made advances. It is a happy day."

During Putin’s 2014 annexation of Crimea, pro-Russian separatist forces took parts of both Donetsk and Luhansk.

The two regions were only officially annexed by Putin last October.