UK's Reeves meets banks to gauge impact of Middle East conflict

UK's Reeves meets banks to gauge impact of Middle East conflict

Finance Minister's Meeting with Major UK Banks

LONDON, March 26 (Reuters) - Britain's finance minister, Rachel Reeves, convened the country's six largest banks and building societies on Thursday to assess the impact of the Middle East conflict on households and small businesses.

Background and Purpose of the Meeting

The meeting with Lloyds, Nationwide Building Society, NatWest, Santander, Barclays, and HSBC follows Reeves' acknowledgment this month of the economic risks Britain faces from rising energy costs due to the conflict, with a commitment to navigate the resulting market volatility.

Commitments from Lenders

The Treasury said Reeves secured a commitment from lenders to contact 1.6 million customers whose fixed-rate mortgage deals are due to expire between now and the end of the year.

"This will set out customers' options on how to access bespoke support well before the payment changes," the Treasury said.

Mortgage Charter and Borrower Support

Reeves also reaffirmed the Mortgage Charter with lenders, under which borrowers can lock in a new rate up to six months in advance and switch deals with their existing provider without undergoing a new affordability assessment.

The charter offers temporary relief, allowing borrowers to switch to interest-only payments for up to six months, with support discussions not affecting their credit scores.

Current Mortgage Market Conditions

"Lenders reported more customers getting in touch for guidance, but real-time data shows lending holding up well and arrears remaining low," the Treasury said.

It added that about 86% of mortgages were on fixed rates, meaning most borrowers were not under immediate pressure from short-term market fluctuations.

Reporting and Editing Credits

(Reporting by Catarina Demony; Editing by Andrew Heavens)