Around 1.3 million more households in the UK are expected to see their mortgage payments increase as the fallout from the ongoing conflict in the Middle East hits the economy, the Bank of England has warned.
In its latest Financial Stability Report, the Bank noted that the UK economic outlook has “deteriorated,” with mounting pressure on households and businesses alike.
Rising energy costs, inflationary pressures, and market volatility are compounding the financial strain on families.
Since late February, the conflict involving US-Israeli operations against Iran has driven sharp surges in oil and gas prices, adding to turbulence across global equity markets. Analysts caution that the combination of higher borrowing costs and volatile energy markets could squeeze household budgets and slow economic growth in the coming months.
The Bankโs warning underscores the broader economic ripple effects of geopolitical tensions, highlighting the UK economy’s vulnerability to external shocks, particularly in energy and financial markets.
โThe shock will weigh on growth, increase inflation and tighten financial conditions,โ according to the report.
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