The Bank of England led bloodcurdling warnings about the scale of the looming 'Trumpflation' crisis today.

Brits face the possibility of six interest rate rises over the coming year as policymakers battle to contain inflation - which they fear could nearly double to 6.2 per cent.

Food prices are likely to be worst affected according to the Bank, potentially reaching 7 per cent by the end of 2026, as the economy effectively grinds to a halt. 

The grim assessment comes as oil prices surged on the back of fears that Donald Trump could start bombing Iran again - with no sign of the Middle East chaos ending. 

Brent Crude topped $120 a barrel overnight, although it later eased off.

The RAC has cautioned that pump prices are poised to start going up again, with petrol likely to be the focus of pain for drivers.

Rachel Reeves has so far resisted mounting pressure to trim fuel duty or announce a significant package of help for consumers, with the cap on energy bills in place until July. She said today that it was 'not our war, but it is one we have to respond to'.

Before the US-Israeli campaign began there were hopes that interest rates would be coming down. 

But the Bank's Monetary Policy Committee kept the level on hold at 3.75 per cent at its latest meeting today. 

Chief economist Huw Pill voted for an immediate 0.25 percentage point increase, although the other eight members backed a standstill. 

The MPC suggested there could need to be a series of hikes to 5.25 per cent by the start of 2027 under a scenario where oil hits $130 a barrel.

That would ‘raise the risk of a recession’, the Bank acknowledged.

Brent crude spiked to $126 this morning before easing as fears grow that the conflict will continue to choke off energy supplies from the Middle East.

Even under less severe scenarios in which the oil price starts to come down, the Bank signalled that it now looks almost certain to hike rates this year for the first time since 2023.

The war has already pushed inflation to 3.3 per cent and could send it to 6.2 per cent in early 2027 under the adverse scenario modelled by the Bank.

It could mean unemployment surging past two million to 5.7 per cent and economic growth slowing to a sluggish 0.8 per cent.

However, the Bank is not predicting a recession – which is defined as when the economy goes backwards for two quarters in a row.

Even in less severe scenarios, inflation and unemployment rise and gross domestic product (GDP) growth weakens.

The Bank suggested food price inflation will be rising by 4.6 per cent by September, as higher energy costs for imported and domestic production feed through.

Pressure on goods such as fertilisers are expected to push food costs up further in the longer run. 

'Contacts of the Bank’s Agents report that food price inflation could rise to around 6 per cent–7 per cent by the end of the year, although the timing and magnitude of that rise are uncertain,' the MPC report said.

Financial markets are already expecting higher interest rates, which has fed through to higher mortgage costs – with monthly payments expected to rise by an average £80 a month according to the Bank.

Inflation is already rising thanks to higher fuel prices caused by the war, with a further spike likely when the energy price cap goes up in July.

The Bank expects that consumers will have to swallow the increases in the cost of living with price rises ‘likely to materialise more quickly’ than wages.

Living standards are already dipping with household income falling by 0.5 per cent in real terms in the current second quarter as prices shoot higher.

Rate-setters will closely watch whether an inflation spike does turn into a wider spiral as workers demand higher pay.

Bank of England governor Andrew Bailey said: ‘The war in the Middle East is causing inflation to rise again this year.

‘We’ve held Bank rate unchanged at 3.75 per cent.

‘We think this is a reasonable place given the situation of the economy and the unpredictability of events in the Middle East.

‘We’ll continue to monitor the situation and its impact on the UK economy very closely.

‘Whatever happens, our job is to make sure that inflation gets back to the 2 per cent target after the initial impact of the war on energy prices has passed.’

Ed Monk, a pensions and investment specialist at Fidelity International, said today’s decision ‘may be the calm before the storm’.

And he warned that a series of rate hikes in the coming months ‘would place a hard brake on an economy that is forecast to grow only slightly this year’.

Martin Beck, chief economist at WPI Strategy, said: ‘Today’s Bank of England decision underlines a Monetary Policy Committee grappling with an unusually uncertain outlook.

‘At the heart of the debate is how persistent the recent rise in energy prices will prove, and whether its impact on inflation fades or becomes more embedded.

‘Faced with that uncertainty, the MPC has opted for the least risky course: to wait.’

Professor Joe Nellis, an economic adviser at accountancy firm MHA, said: ‘The long-term picture of the UK economy is still uncertain, but it is becoming clearer that weak growth, coupled with rising inflation pressure, will be a defining characteristic.’