Lenders lift mortgage rates as Iran war hits borrowing costs

UK lenders have begun raising mortgage interest rates as the ongoing conflict in the Middle East has raised fears that inflation will rise and curb further Bank of England rate cuts. Nationwide has increased rates on some of its products by up to 0.25%, while HSBC UK and Coventry Building Society have also said they will increase rates. The increases come after changes to the financial market's view of what the Bank of England will do to UK interest rates. David Hollingworth, associate director at L&C Mortgages, does not expect mortgage costs to skyrocket but said borrowers considering a new fixed-rate deal should try to secure that "sooner rather than later". Nationwide said its rate changes to some of its two, three, five and 10-year fixed rate products would apply to all new mortgage applications from Friday. Those products include its mortgages for first-time buyers, new and existing customers who are moving, those who are remortgaging and people switching. When setting mortgage rates, lenders are heavily influenced by a financial market measure called "swap rates" which reflect the market's view of which direction the Bank of England's interest rates will go. A Nationwide spok