Some City traders have forecast that interest rates could be raised three times in 2026, following the Bank of England’s decision to hold its rate at 3.75 per cent.

The Bank’s Monetary Policy committee (MPC) voted unanimously to hold the base rate on Thursday, citing concerns that the war between US and Iran will push up inflation by raising energy costs.

More than 500 mortgage deals were pulled from the market last week, the highest number since the aftermath of the ‘mini-Budget’ presented by former prime minister Liz Truss. Meanwhile, the average rate on two-year fixed deals has risen above 5 per cent for the first time since August.

Experts had been anticipating the Bank to cut its base rate this month following a drop in the headline inflation rate from December to January. It is now expected that inflation will rise again as disruption to the global oil trade causes the cost of energy and fuel to spike.

A British man jailed for a decade in Iran on spying charges has accused the UK government of abandoning him and his wife. Craig Foreman, speaking from prison, expressed profound disappointment alongside his partner, Lindsay, after they were handed 10-year sentences.

The 53-year-olds, who deny the espionage charges, feel “let down, alone and completely frustrated” by the handling of their case, Mr Foreman stated. The couple, from East Sussex, were detained in January 2025 while on an around-the-world motorcycle journey through Iran and are now held in Tehran’s notorious Evin Prison.

They have sharply criticised the government, alleging they were left to fend for themselves in what Mr Foreman described as a “war zone”.

Health Secretary Wes Streeting described the arson attack on four ambulances belonging to a Jewish Community Ambulance service in Golders Green as “sickening”.

He posted on X: “Thank goodness there appear to be no injuries.

“Anyone with information should come forward to the Police.

“We must stand together against antisemitic hatred.”

Prime Minister Sir Keir Starmer has called for communities to “all stand together” in the face of an “horrific antisemitic attack”, which saw four Jewish community ambulances set on fire.

The Metropolitan Police confirmed the incident is being treated as an antisemitic hate crime, with CCTV showing three individuals setting light to an ambulance in the early hours of Monday morning.

There were no injuries reported in the attack on the Jewish community ambulance service, Hatzola, in Highfield Road, Golders Green, north-west London, around 1.45am, and no arrests have yet been made.

Jewish community leaders condemned the attack, with the Chief Rabbi Ephraim Mirvis saying the targeting of the volunteer service was “particularly sickening”.

Sir Keir Starmer has said he will discuss “every lever available” to protect British people from the impact of the war in the Middle East as he prepares to chair an emergency Cobra meeting on Monday.

The prime minister will convene his top ministers, as well as the governor of the Bank of England, Andrew Bailey, to discuss threats faced by Britain amid the ongoing war in the Middle East.

Speaking on Monday morning, Sir Keir said the meeting will be the opportunity “at the highest level to bring people together on matters of real, significant national importance.”

The meeting is expected to focus on the economic impact of the crisis, energy security and the resilience of industry and supply chains alongside the international response.

“Obviously Cobras are usually used for military considerations, consular considerations, but I think with the Iran war, most people are very concerned now, not only what they’re seeing on their screens in relation to the conflict itself, but also that question of how is it going to affect me and my family?” he said.

“And so today we’re looking at the economic impact, and I am asking for every lever that’s available to the Government to deal with the cost of living to be discussed at Cobra.

“Hence we’ve got the Bank of England and others there. But I want to make sure that when it comes to the cost of living, we’re doing everything we possibly can at a very difficult period like this.”

Political reporter Athena Stavrou reports:

Sir Keir Starmer has rejected suggestions that the UK could be targeted by Iranian missiles, after Tehran took aim at the military base on the Chagos Islands.

The Israeli Defence Forces suggested over the weekend the attack showed Iran is now capable of reaching cities such as London, Paris or Berlin.

But speaking on Monday, the prime minister said there is “no assessment” that the UK is being targeted by Iranian missiles.

“We carry out assessments all the time in order to keep us safe, and there’s no assessment that we’re being targeted in that way at all,” he said.

“But of course, it’s my job to ensure that British interests, British lives are always uppermost in my mind.

“What we need here is de-escalation, and that’s why we had a statement from a number of countries last week about what we need to do about the Strait of Hormuz, which obviously needs careful coordination and a viable plan.”

Donald Trump has set a 48-hour deadline that ends just before midnight UK time on Tuesday, warning Iran that the US would attack its power stations unless the country releases its grip on the Strait of Hormuz.

But Iran has said it will retaliate by striking electrical plants across the Middle East if Mr Trump follows through on his threat.

Financial markets fell sharply and oil prices extended gains further as the Middle East war entered its fourth week with global focus remaining on the need to break Iran’s stranglehold on the key shipping route for energy supplies.

Brent crude lifted 1 per cent to nearly 114 US dollars a barrel after Iran warned it will strike electrical plants across the Middle East if US president Donald Trump follows through on his threat to bomb power stations in the Islamic Republic.

The FTSE 100 Index fell back further from the 10,000 market, dropping 1.6 per cent soon after opening on Monday to stand 161.5 points higher at 9756.8.

London’s blue chip share index dropped below 10,000 on Friday for the first time since reaching the milestone level in early January.

In Europe, the Dax in Germany was 1.8 per cent lower and France’s Cac 40 fell 1.4 per cent.

It follows heavy falls overnight in Asia as the rhetoric from the US and Iran suggested little sign of a resolution to the conflict, with the Nikkei in Japan ending down more than 3 per cent.

A government minister has insisted Sir Keir Starmer would not be affected by Donald Trump sharing a comedy skit mocking him.

The US president shared a comedy sketch from the new Saturday Night Live UK programme on his Truth Social platform on Sunday.

In the clip, Sir Keir, played by George Fouracres, panics as he tries to dodge a phone call from Mr Trump and asks his deputy: “Oh golly – what if Donald shouts at me? What do I say, Lammy?”

Asked about the sketch on Monday, housing minister Matthew Pennycook told Sky News Mr Trump “posts all manner of things”.

“But I think the prime minister would say this is a comedy sketch,” he said. “He would take it in the spirit in which it is intended… If he had time to watch it, that is, he’s pretty busy preparing for the Cobra meeting this afternoon.”

A government minister has called for “de-escalation” after Donald Trump set a deadline for Tehran to fully reopen the Strait of Hormuz.

The US president set a 48-hour deadline, due to expire on Monday, demanding Iran open the Strait of Hormuz or face the destruction of its power plants.

Asked whether the government agrees with this approach, housing minister Matthew Pennycook told Sky News: “You’re tempting me to comment on US strategy that’s for the US government.

“We have been very clear, alongside our allies, France, Germany, Italy, Japan, that we need to urgently see an end to this conflict. We need to de-escalate matters. That’s in our national interest.”