Chancellor Rachel Reeves will meet the leaders of Britain’s largest banks on Wednesday to assess the economic fallout from the escalating conflict in Iran and coordinate support for households and businesses.

Executives from Barclays, HSBC, Lloyds, NatWest, Santander UK and Nationwide have been invited to the summit, first reported by Sky News, with attendees expected to include NatWest chief executive Paul Thwaite and Lloyds boss Charlie Nunn. The discussions will centre on mitigating the domestic impact of rising energy prices and financial market volatility linked to tensions in the Middle East.

According to sources familiar with the plans cited by outlet, ministers are particularly concerned about mortgage holders, with 1.6 million customers due to roll off fixed-rate deals by the end of 2026. Banks are expected to update the government on their commitments under the mortgage charter, which sets out options for borrowers facing higher repayments.

The Bank of England has warned that more than 1 million households could see the cost of servicing home loans increase, while as many as 5.2 million borrowers may face higher payments by 2028. Its financial policy committee has also noted that lenders have withdrawn around 1,500 mortgage products and raised rates on thousands more in response to market instability.

Recent economic data has added to concerns. The Office for National Statistics reported that UK GDP grew by 0.5 per cent before the latest escalation, but Martin Beck, chief economic adviser at WPI Strategy, said the figures were the “calm before the storm” as weaker data is expected in coming months.

International forecasts have also deteriorated. The International Monetary Fund recently cut its UK growth projection by 0.5 percentage points, citing the impact of higher energy prices following disruption in the Middle East.

Banks are preparing to reflect these risks in upcoming first-quarter results, with analysts expecting higher provisions for loan losses. A note from RBC Capital Markets indicated Barclays could be the most exposed due to relatively optimistic economic assumptions, including a 1.1 per cent growth forecast for 2026 compared with 0.7 per cent at Lloyds.

Regulatory issues are also likely to feature in the meeting. Senior bankers have renewed calls for reform of ring-fencing rules introduced after the financial crisis, although Barclays chief executive CS Venkatkrishnan defended the regime, stating that “the immense amount of depositor protection that the ring-fencing regime gives the country” must be weighed against its costs.

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