A trade war could push up inflation when both the UK and US economies really need cheaper borrowing. So what’s a central bank to do?

Monetary policymakers on both sides of the Atlantic will be considering how seriously to take Donald Trump’s threats of an all-out trade war as they give their verdict on the path of interest rates this week.

The Federal Reserve, the US ­central bank, will examine the prospect of a “Trumpcession” brought on by tariffs that send import costs rocketing and convince consumers, already shellshocked from the cost of living crisis, to stop spending.