A delay to interest rate rises could create a mini stamp duty holiday effect as buyers rush to lock in cheaper debt that will push up house prices in the next few months.

The additional spike in inflation caused by the ban on Russian fossil fuels and food exports from Ukraine has meant economists have cut back how far they think interest rates will rise this year.

They have argued that this could act as a short-term boon to the housing market, with some analysts forecasting higher house prices in the short term. The Centre for Economics and Business Research, a consultancy, has raised its house price forecast for 2022 from 3.3pc to 3.8pc.

Soaring inflation
Three weeks ago, analysts were forecasting a historic 0.5 percentage point jump in the Bank Rate this week.

Since then, the war in Ukraine has fired up inflation forecasts even higher. Back in January, the Bank of England forecast that inflation would peak at 7.25pc in April. Goldman Sachs, an investment bank, has now estimated it will hit 9.5pc in October.

Typically, higher inflation means more pressure for the Bank of England to raise interest rates. But this situation is different. Historically, instability deters the Bank of England from interest rate rises.

What will happen to interest rates?
In February, four members of the Bank of England’s Monetary Policy Committee meeting voted for a 0.5 percentage point increase in the Bank Rate, meaning many analysts considered this a likely option for the March MPC meeting, which will take place on Thursday.

But analysts now expect a smaller rate rise this month. Most have forecast a 0.25 percentage point increase, taking the Bank Rate to 0.75pc. This is the most likely outcome “by a large margin”, according to Pantheon Macroeconomics, a research consultancy.

But new stress in financial markets as a result of the war means that it is also possible that there could be no change in the Bank Rate.