LONDON — U.S. President Donald Trump’s shadow is set to loom over the British economy as the Bank of England on Thursday warned fresh conflict in Iran could send prices soaring.

New U.K. Prime Minister Andy Burnham took office last week with a flurry of cost-of-living announcements — but it’s the U.S. president’s policies that risk having the biggest potential knock-on to U.K. inflation, according to the central bank.

The Bank's Monetary Policy Committee decided Thursday to keep interest rates on hold but warned the stop-start conflict in the Middle East could become a persistent energy shock and force rate hikes.