The US and Israel began a series of strikes on Iran on 28 February, with the conflict spreading to include Iranian attacks on targets in multiple Gulf countries.

Gilt yields moved in response, with five-year gilts up around 19bps today, the two-year up around 12bps and the 10-year up about 14bps.

Investment bank Panmure Liberum said on a call that the issue is around energy supply and disruption: “The bigger geopolitical and economic risk is supply disruption, not simply the initial spike in prices. How long the conflict lasts, and how long supply chains are impaired, will be a major driver of the macro outlook.”

Several mortgage lenders due to make rate cuts today are carrying out emergency repricing.

John Charcol mortgage technical manager Nick Mendes said: “In other words, funding costs have pushed north again, and that matters for mortgage pricing.

“The next MPC meeting is 19 March. In a fast-moving, unpredictable backdrop, the picture could look materially better by then, or it could deteriorate further. Either way, a near-term [Bank of England base rate] cut is now clearly less likely than it was even a week ago.

“Santander’s cuts today will have been signed off last week before this latest jump in yields fed through. With uncertainty higher and wholesale funding costs rising, it would not be surprising to see lenders turn more defensive.”

Gen H chief commercial officer Pete Dockar said: “The war in Iran – specifically the hampered distribution of oil through the Strait of Hormuz – is already having an effect on global financial markets and swap rates are no exception.

“Pricing teams at mortgage lenders across the country are deep in discussions right now, frowning at their spreadsheets, deciding whether they need to price up or if they can hold – and for how long.

“This is a bit of a blow to the mortgage market because, for the first time in recent memory, buyers were feeling really optimistic; steady house prices and lower rates were driving healthy demand. But if there’s anything we’ve had to get used to in the last few years, it’s this kind of volatility. So as ever, I return to the one piece of consumer advice that never changes: talk to your broker and lock in a rate if it’s right for you.”

Mendes added that mortgage rates could rise by more than any change in funding costs, as lenders can become more defensive when visibility worsens.

He said: “So, the message for anyone needing a new rate, particularly those coming off a fix, is straightforward: don’t sit on it. If you’re in window, secure a new fix as soon as you can. A broker can still help you lock something in and keep options open if pricing improves again before completion.”