Russia signed off on a series of steep price rises for domestic gas, power and railway services for the next four years on the eve of Dmitry Medvedev's inauguration as president.

Mr Medvedev, who will be sworn in as Russia's president today, will inherit a potentially poisoned chalice of increasing economic and political risks as inflation surges to as much as 14.3 per cent. Thousands of people across Russia took to the streets on May Day in rare demonstrations against rising food prices and living costs, the same day as a pre-election price freeze on basic foodstuffs expired.