The warning was given after the bank’s report showed a sharp increase in living costs as debt and bill levels rise and inflation reaches a nine-year high of 2.5 per cent.
Michael Saunders, chief UK economist at Citigroup, told the Daily Telegraph that the figures are “a clear red alert warning on inflation risks.”
He added that prices and external costs have swung from being disinflationary to inflationary, which puts additional pressure on consumers.
According to the Bank of England’s reports, retail services prices are rising at the fastest level since the records began in 2000, contributing to the soaring cost of living.
With rising costs levels eating into disposable incomes, many consumers may take head of Mr Saunders’ “red alert” and start taking out debt help now before it is too late.