Pill Pushes for Bank Rate Hike Amid UK Mortgage Rate Pressure

Bank of England Chief Economist Huw Pill has called for an immediate bank rate rise amid growing concerns over UK mortgage rates. In a speech at the Edinburgh Chamber of Commerce, Pill warned that waiting to address inflation pressures could allow them to become entrenched.

Pill argued that a 25-basis point increase to 4% would send a 'clear and unambiguous signal' of the Monetary Policy Committee's resolve on upside inflation risks. He also cautioned against delaying, which he said risked embedding a 'bias to the status quo', allowing Iran-linked energy costs to push inflation higher for longer.

The Bank of England data shows that fixed costs have already climbed sharply since the Iran conflict began in late February 2026. The typical two-year fixed rate at 75% loan-to-value (LTV) had risen to 4.92%, up from 4.20% in December 2025.