Experts see events in Iran as having a crucial say on the UK’s inflation outlook and the Bank’s path ahead.
After its last decision in July, the central bank’s governor Andrew Bailey said prolonged oil price increases could force its hand on interest rates. “If we get a continuation of this conflict going on and oil prices stay above $100 a barrel… the odds are that interest rates will have to go up higher,” he told the BBC.
When the BoE’s Monetary Policy Committee (MPC) changes the base rate, high street lenders typically move their own mortgage rates in response because their cost of borrowing from wholesale money markets rises.
That means central bank rate hikes typically make variable-rate and tracker mortgages more expensive almost immediately, while fixed-rate deals tend to price in anticipated future rate moves more gradually.
The central bank’s next decision is scheduled to arrive on September 17, with two further announcements pencilled in after that – on November 5 and December 17.