Britain is facing the return of a full-blown cost-of-living crisis that could have major implications for interest rates, a former Bank of England policymaker has warned, with inflation poised to soar back above 5% as early as this autumn.

In a stark intervention, Andrew Sentance – a former member of the Monetary Policy Committee – said a “perfect storm” of global trade tensions, rising wages, and spiralling utility bills is set to send prices soaring once more, heaping fresh pressure on families and businesses. And he warned the Bank of England to 'hold fire' on any possible cuts to interest rates.

Official figures currently put UK inflation at 2.8%, having dipped to the Bank’s 2% target last summer thanks to falling food and energy prices. That drop prompted a series of interest rate cuts – from 5.25% to 4.5% – offering some relief to mortgage holders.

But Sentance has now warned that the downward trend is reversing rapidly – and could be made even worse by aggressive new tariff proposals from US President Donald Trump.

“Warning signs have been there for some time,” he told This is Money. “And Trump’s tariff proposals have added an extra layer of uncertainty. We could see inflation rise above 5% if these pressures intensify.”