Britain is facing a winter of discontent after the Bank of England predicted a rise in energy bills and left the door open to an interest rate hike later this year.

The latest hit would see households face the most expensive winter in four years. 

The prospect of more financial pain falling on families will pile pressure on Andy Burnham to provide more support.

'Britain is heading towards what is likely to be its most expensive winter since 2022/23,' said William Ellis, senior economist at Left-wing think-tank the Institute for Public Policy Research. 

'Families could be hit twice: first through higher energy bills, and then higher mortgage repayments if the Bank raises rates later this year.

'If the conflict [in the Middle East] does not de-escalate quickly, the Government should use the Autumn Budget to announce a temporary ceiling on household energy bills.'

Mr Ellis argued that support could be needed to 'protect families' and safeguard living standards. But the idea of spending more money on the cost of living could prove challenging as the state of the public finances leaves Chancellor John Healey with little room for manoeuvre.

The prospect that Britons could be suffering on a comparable scale to 2022 will bring uncomfortable echoes of a period when the initial impact of the Ukraine war caused energy prices to soar.

At the same time, mortgage rates had spiked after market turbulence caused by Liz Truss's disastrous mini-Budget. Energy prices and mortgage rates have again been on the rise in recent months as US President Donald Trump's war on Iran chokes off oil and gas supplies from the Middle East, causing inflation pressure.

Markets are betting the Bank of England will respond by raising interest rates later this year. On Thursday, the Bank left interest rates on hold at 3.75 per cent though officials were split, with three members of the rate-setting Monetary Policy Committee voting for a hike.

Governor Andrew Bailey said: 'The conflict in the Middle East continues to mean high and volatile energy prices. That will cause inflation to rise again this year.' And he warned that if the war in the Middle East continued and inflation pressures deepen, rates would be likely to have to rise.

That would mean more pain for millions of homeowners who have already seen their borrowing costs rise over recent months.

The Bank expects the cap on household energy tariffs will rise again in October, taking typical bills from £1,663 to £1,680. It would have been £45 higher were it not for Mr Burnham temporarily removing VAT on household electricity bills, the Bank said.