Arabic version: بنك إنجلترا يحذر من ارتفاع تكاليف الرهن العقاري بسبب الصراع في إيران

The Bank of England has issued a warning that approximately 1.3 million homeowners in the UK may experience increased mortgage payments by the end of 2028 due to the war in the Middle East. According to BBC News, the Bank’s latest report highlights the potential for rising borrowing costs as a result of the economic “shock” triggered by the conflict.

The report indicates that a total of 5.2 million households are now expected to face higher mortgage costs in two and a half years, up from the 3.9 million predicted prior to the conflict. However, the Bank notes that the anticipated increases in mortgage payments will likely be “modest” compared to significant hikes seen in previous years, such as those following the mini-budget in 2022.

Since the US-Israel attacks on Iran began a month ago, oil and gas prices have surged, contributing to a rise in government borrowing costs. The Bank’s Financial Policy Committee has expressed concern that this situation could adversely affect economic growth and lead to higher inflation, stating that the UK’s economic outlook has “deteriorated” as a result of the conflict.

The committee further emphasized that UK households and businesses could face increased pressure, particularly if elevated energy and mortgage costs are sustained. Despite these challenges, the Bank asserts that the financial system, including banks, has shown resilience thus far, managing to absorb significant market fluctuations since the conflict began. Additionally, they believe the UK banking system will continue to support households and businesses even if economic conditions worsen significantly.