The war in Iran is affecting the cost of living around the world. In the UK, it is leading to higher energy prices, weaker economic growth and a more expensive future.

It may seem odd that fighting in the Middle East could have such a profound affect on household finances in the East Midlands (and everywhere else in the UK). But since the conflict began on February 28 2026, banks and building societies have withdrawn over 1,500 mortgage products from the UK market.

For many borrowers, especially first-time buyers and those coming off fixed-rate deals, the prospect of cheaper borrowing has quickly faded.

Mortgage rates have started to rise again, with two-year fixed rates increasing from around 4.8% to about 5.5%. For a borrower with a £200,000 mortgage over 25 years, this would mean an increase of £90 in monthly payments, adding close to £1,000 a year to household costs.

So how exactly does a war in the Middle East feed through to the cost of borrowing in the UK?

The biggest effect comes from energy. The conflict is directly affecting oil production in a region that accounts for roughly one-third of the world’s supply (and 20% of its liquid natural gas).

Energy costs affect almost everything, from transport and........

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