Is government influence keeping the central bank on the sidelines?
The Bank of England should have raised its base rate to 4% already – and the reason it hasn’t is due to direct pressure from a government afraid of public backlash, according to a prominent UK-based mortgage broker.
In its last decision in April, the central bank held rates steady, giving itself time to weigh up how the US-Iran war is impacting inflation and the wider economic outlook.
But that’s the wrong approach, according to Nouran Moustafa (pictured top), executive financial and mortgage adviser at Roxton Wealth, who told Mortgage Introducer the numbers simply don’t add up as she pointed the finger squarely at Westminster.
"The Bank of England base rate should have gone to 4% ages ago," she said. "Personally, I think the only reason it has not is because the government is putting pressure on the Bank of England. They don’t want the public to be way more against the government and the Prime Minister than they already are."
Moustafa says the economic logic is hard to dispute. "If you look at the latest data published in April 2026, you’re looking at a CPI inflation of 3.3%. How on earth is inflation 3.3% while the Bank of England base rate is 3.75%?” she said. “Even a first-year economics undergraduate would tell you the base rate has to go up."
Political uncertainty compounding the damage
The broader political landscape, she said, is piling further uncertainty onto an already fragile market. "We have got a Chancellor that is extremely disconnected from what is happening in real life. We have got a Westminster that does not have a clue what is happening outside. All of that is scaring markets, scaring investors, scaring people – and it is not helping at all."
For lenders, the environment is producing its own distortions. High street banks are accepting moderate risk to drive lending volumes in what Moustafa described as a very quiet market, while specialist lenders funded by capital markets face a different set of pressures entirely.
"The non-high street banks, because they get their money from the market and not from people, they can’t take rates lower," she said. "The high street banks are just taking a moderate amount of risk to try and drive some sort of lending into their books because it has been really quiet."
Consumer uncertainty on the up amid wider strain
The human cost of the Bank's inaction is playing out daily in Moustafa's client base, she said. Borrowers months away from remortgaging are already in a state of acute anxiety, and some with more than a year left on their fixed rate fear they will not be able to afford their homes when it ends.
"One of my clients, who still has a year and a half left on her fixed rate, texted me: 'I am too scared. In a year and a half, I wouldn't be able to afford my home’. That is how much of a disastrous situation we have got from a consumer perspective."
Moustafa is equally sceptical of tracker rates as a solution. "If the Bank of England raises the interest rate, which should happen at some point, then mortgage payments are going to hike, and 100% of tracker rates right now have a fee you have to pay or add on top of the loan, so it’s a lose, lose situation."
Advisers must stop chasing the cheapest rate
Moustafa said the profession has to rethink its core habits. The drive to maximise borrowing and secure the lowest available rate has become, in her words, "a religion" – and the current environment should serve as a warning.
"The most important thing is to hand the client a mortgage that is sustainable now and sustainable over the long term should interest rates go up," she said. "We need to mentally and financially prepare the client that the situation in two years' time might be better but also might be worse. I don’t think anyone is having this conversation with first-time buyers."
Consumers can’t put their lives on hold waiting for the Bank to act, Mustafa said. But unless political pressure on monetary policy eases, the uncertainty – for borrowers, lenders, and the advisers caught between them – is unlikely to resolve any time soon.
The wider UK mortgage market is watching closely for any signal of change, with mortgage professionals across the country navigating one of the most politically charged rate environments in recent memory.
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