Borrowers face higher fixed rates and shrinking options as geopolitics rattle markets
United Kingdom borrowers have woken up to another jump in mortgage costs, with many directing their anger at “Trumpflation” – a catch‑all label for inflation pressure they link to United States president Donald Trump’s Iran policy and the resulting surge in energy prices.
Data provider Moneyfacts reported that the average two‑year fixed residential mortgage rate has risen to 5.20%, from 5.10% at the end of last week and 4.84% before last month’s US‑Israeli war on Iran.
Five‑year fixed rates has climbed to 5.25% from 5.19%, while the number of residential products on sale have dropped to 6,972 from 7,106, reflecting lenders’ caution as markets price out near‑term Bank of England cuts and even factor in Bank Rate returning to 4% by summer 2027.
Union leaders framed the spike in borrowing and energy costs as a political shock.
“Working people are being hit with a Donald Trump‑made cost of living crisis,” Trades Union Congress general secretary Paul Nowak said.
“It's right that the Prime Minister has acted quickly to support those most acutely affected by rising energy prices. This illegal war and ongoing chaos will continue to threaten living standards. More support will likely be needed to stave off ‘Trumpflation’.”
In energy markets, oil prices eased from their recent highs after US Treasury secretary Scott Bessent signalled Washington is allowing Iranian crude to continue transiting the Strait of Hormuz to keep global supplies flowing.
“The Iranian ships have been getting out already, and we've let that happen to supply the rest of the world,” Bessent said in a CNBC interview, adding that more fuel cargoes from India and China are also moving through the chokepoint.
Brokers said the latest repricing built on weeks of swap‑rate volatility that has already forced lenders to pull and relaunch products at short notice.
In a recent interview, Windsor Hill Mortgages director Elliot Cotterell said “recent geopolitical tensions are feeding through into UK mortgage pricing via swap rates”, with lenders withdrawing and repricing products as funding costs shift.
Market veterans cautioned that some of the most eye‑catching claims – including talk of a purely “Donald Trump‑made” crisis and precise projections for Bank Rate in 2027 – reflect political or market opinion rather than settled economic fact or official forecasts, even as households clearly felt the squeeze.
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