How will UK banks and their customers be affected by the Iran war?

It follows an uncertain few months for households and businesses with mortgage rates spiking following the start of the US-Israel's war with Iran and higher oil prices pushing up fuel and energy bills. But most experts are expecting the lending giants to have grown their profits over the first half of the year. And Lloyds is expected to have generated £4.1 billion, up from £3.5 billion in the same period in 2025. Steve Payne, KPMG's UK head of banking, told the Press Association that banks are likely to continue benefiting from interest rates staying higher for longer, in response to concerns about inflation. He said banks were likely to take a "realistic approach" by increasing their provisions.