Make the crumb topping: Whisk together flour, sugar, cinnamon, baking powder, and salt in a bowl; add butter, and rub into flour mixture with your fingers until large clumps form. Stir in walnuts and refrigerate until ready to use.

Make the cake: Heat oven to 350ºF. Grease and flour an 8x8-inch baking pan; set aside. Whisk together flour, baking powder, and salt in a bowl; set aside. Using an electric mixer with paddle attachment, beat butter, sugar, and vanilla in a bowl on medium-high speed until pale and fluffy, about 3 minutes. Add egg; beat until smooth. Alternately add dry ingredients and milk in 3 batches, beginning and ending with dry ingredients; beat until combined. Pour into pan; smooth top. Break topping up into large clumps; sprinkle evenly over batter. Bake until topping is lightly browned and a toothpick inserted in the middle comes out clean, about 40 minutes.