Interest rates LIVE: Bank of England set to make major announcement at 12pm | Personal Finance | Finance

The housing market is showing early signs of stabilisation, but the detail in the March data underlines just how distorted the backdrop still is, says Ian Futcher, financial planner at wealth management firm Quilter.

He said: “Markets are firmly expecting a hold, but that should not be mistaken for stability. The Iran conflict has become the key external variable, through its potential to keep energy prices elevated and delay the path back to target inflation. That has a direct bearing on housing.”

For borrowers, a hold means no immediate change in monthly repayments for those on tracker or standard variable rates. However, the financial expert warned that the real influence is through expectations.

Mr Futcher said: “Swap rates have eased from the volatility seen at the outbreak of war, and that has started to feed into mortgage pricing.

“Lenders are already responding, becoming more competitive to stimulate activity in what remains a soft market.

“But the improvement is fragile. What matters most from today is the Bank’s guidance.

“If policymakers treat the geopolitical backdrop as a risk to monitor rather than a reason to tighten further, that should help anchor expectations that there is no imminent hike. That would support a gradual improvement in mortgage pricing and, in time, transaction volumes.

“Anything that suggests a hike in the future is likely to feed back into higher swap rates and therefore higher mortgage pricing.”