The Bank of England (BoE) has warned that escalating trade barriers are a ticking time bomb for the global economy. The central bank’s latest financial stability report didn’t hold back, detailing how higher restrictions on international trade are shaking up economic growth and creating massive uncertainty around inflation.

The Bank of England warned on Friday that higher trade barriers could hit global growth and feed uncertainty about inflation, potentially causing volatility in financial markets and pushing up borrowing costs for businesses and consumers.

Global trade barriers threaten global economic growth and unsettle the stability of the UK’s financial system.

More work is needed to tackle risks outside the banking sector, according to a Bank of England study which found that a market crisis would be amplified by fire sales of assets by pension funds, hedge funds and other investors.

The Bank of England warns of potential financial stability risks from higher trade barriers, geopolitical tensions, and pressures on government debt levels.