The Bank of England has held interest rates a 3.75 per cent in the wake of the economic impact of the Iran war.
In December 2025, the Bank of England cut its base rate by 0.25 per cent to 3.75 per cent – the lowest level in almost three years.
However, the ongoing conflict in the Middle East dashed hopes of further cuts.
Richard Merrett, managing director of Alexander Hall, said:“Today’s decision to hold the base rate should provide reassurance for borrowers that the broader outlook remains one of stability.
“While the market has adjusted in response to recent movements, the medium-term picture for borrowing costs is still far more predictable than it was a year ago.
“It’s also important to keep these changes in context. Although swap rates have increased in response to the latest global developments, they remain lower than they were this time last year.
“While there has been some upward movement in recent weeks, the mortgage landscape is still operating from a more stable and favourable position than borrowers were facing 12 months ago.”
Guy Gittins, CEO of Foxtons, said: “Today’s decision from the Bank of England was largely expected given the market movements we’ve seen in recent weeks following developments in the Middle East.
“So far this year, we’ve seen steady growth in both house prices and supply. We expect this to continue against the backdrop of a more stable and favourable position for borrowers when compared to twelve months ago, despite recent market adjustments.”
Jonathan Samuels, CEO of specialist lender Octane Capital, added: “Today’s decision to hold the base rate reflects a more cautious stance from the Bank of England but one that is to be expected given recent developments in the Middle East, which have already filtered through into swap rates and lender pricing.
“However, while swap rates have climbed in the short-term in response to these events, they remain notably lower than they were this time last year, and by a wider margin than the increase seen since the start of the Iran conflict.
“As a result, the underlying outlook remains far more stable than it was a year ago, and holding the base rate should help lenders maintain confidence in their pricing, ensuring borrowers continue to benefit from a competitive and accessible mortgage market.”
Damien Jefferies, founder of Jefferies London, commented:“Today’s decision to hold the base rate will be viewed as a measured response to recent global developments, which have influenced sentiment across financial markets quite considerably in recent weeks.
“For international and high-net-worth buyers, consistency in monetary policy is key, so today’s decision to hold the base rate will provide some stability in this respect.
“London remains a highly attractive destination for global property investment, and in times of wider global change, we often see an increased appetite from overseas buyers looking to secure assets within established, transparent markets such as the UK.”
Verona Frankish, CEO of Yopa Property, said: “Today’s decision to hold the base rate is unlikely to come as a surprise, however, the important point is that the UK property market remains in a far stronger position than it was this time last year, despite increased instability on the global stage.
“Buyer confidence has improved, borrowing conditions have become more predictable, and a steady base rate will only help provide the certainty many domestic buyers need to move forward with confidence.”
Marc von Grundherr, director of Benham and Reeves, said: “Today’s decision to hold the base rate should help reinforce growing confidence across the domestic property sector, which has continued to perform well so far this year, with strong levels of buyer activity and steady transaction volumes being seen.”
Kris Brewster, interim CEO at LHV Bank, said: “This base rate hold reflects just how uncertain the outlook has become. Inflation was already running ahead of target, and with tensions in the Middle East driving up oil prices, the risk is that price pressures build again before they ease.
“Even without a rate move, households are likely to feel the impact through higher fuel costs and rising prices across everyday spending. That makes it more important than ever to make sure cash is not sitting in low paying accounts.
“One way for consumers to protect their finances and manage persistent inflation is by switching to current and savings accounts offering rates of 3.75 per cent AER or more. These products can help everyday balances keep pace, rather than lose value over time.
“People cannot control global markets or energy prices, but they can take control of where they keep their money. In a period like this, making small, practical changes can make a real difference to household finance