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.”