UK mortgage interest rates expected to rise despite Trump’s Iran pause

Bank of England likely to make two quarter-point increases amid sustained rise in inflation, investors believe ‘Trumpflation’: how the Iran war’s economic storm could affect Britons Homeowners’ choice of mortgage deals has shrunk and interest rates on home loans are expected to rise this week despite financial markets reacting positively to Donald Trump’s pause on his threat to attack Iranian power plants. Early on Monday, as the end of a two-day deadline set by Trump for a deal with Iran grew closer, financial market data implied that investors believed the Bank of England would attempt to tackle rising prices with four quarter-point increases in rates before the end of December. After Trump instructed US defence officials to postpone airstrikes against Iranian energy infrastructure for five days, investors reduced the number of rate rises they expect to two quarter-point increases, from 3.75% to 4.25% this year. However, in what will be a blow to mortgage payers, international investors continued to bet that the UK is vulnerable to a sustained rise in inflation after the US-Israel attack on Iran. Expectations that the Bank will raise rates several times this year has dr