Trump’s tariff war: The silver linings for families including mortgage and petrol prices

President Trump’s tariffs bombshells – which keep on coming – have unsettled financial markets but there could be benefits for millions of UK households

Expectations of a Bank of England rate cut has seen the return of sub-4% fixed deals(Image: PA)

While Donald Trump’s tariff war threatens the global economy, there are silver linings for UK households – for now at least.

Mortgage borrowers looking for cheaper fixed deals are beginning to see savings, some under 4%. That is because swap rates – which influence how much lenders charge – have fallen in anticipation of the Bank of England cutting its base rate if the economy weakens.

The Coventry Building Society joined in by reducing its two-year fixed deals to below 4%.

David Hollingworth, from L&C Mortgages, said: “The stock market turmoil has led to expectations that interest rates will have to move more quickly, and that has implications for swap rates. That means lenders can secure their fixed rate at lower levels.” He said the fall in swap rates was “substantial in a brief period of time.”

Michelle Lawson, Director at Lawson Financial, said: “And so it begins. Competitive Coventry have declared their hand with a fantastic rate not seen for a while. Tariff wars may be playing out globally but UK borrowers look like they will finally start getting some much needed relief.”

David Stirling, director at Mint Mortgages and Protection, added: “Hopefully this marks the start of a wave of mortgage rate cuts from major lenders. Amid global economic uncertainty driven by Trump’s tariffs and the ongoing decline in swap rates between banks, Coventry is unlikely to be the last lender to offer attractive rates to the right customers this week.”

Falling oil prices could feed through to cheaper fuel bills – as long as they stay low(Image: PA)

And Stephen Perkins, managing director at Yellow Brick Mortgages, said: “Lower fixed mortgage rates are incoming. Coventry follow TSB and other lenders in finally passing on the recent swap rate reductions to borrowers, which should now apply market pressure to the big six lenders to follow suit, causing rates to fall like dominoes.”

There could be savings for motorists too after oil prices fell below $60 a barrel for the first time since 2021. Traders are speculating that weaker economic growth will dent demand for oil.

President Trump’s sweeping tariffs have led to stock market turmoil(Image: AFP via Getty Images)

Oil prices plunged as much as 7% on Wednesday, hitting fresh four-year lows before recovering some ground, after China announced additional tariffs on US goods in retaliation against President Donald Trump’s tariff policy. However, prices then climbed more than 4% after President Trump said he would further increase tariffs on China but pause the tariffs he announced last week for most other countries.

Simon Williams, head of policy at the RAC, said: “With the cost of a barrel of oil now at its lowest cheapest since the pandemic in April 2021, wholesale fuel costs are falling fast – putting more pressure on retailers to cut pump prices. “We expect to see the first of these price cuts taking place later this week as the largest retailers buy in new stock.”

A decision last week by the OPEC+ group of producers to raise output in May by 411,000 barrels per day, which analysts say is likely to push the market into surplus, limited oil’s gains.

In the US, stocks of crude oil rose by 2.6 million barrels to 442.3 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 1.4-million-barrel rise.

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