Welsh economist; chief economist, Bank of England since 2021
The Bank of England has kept Bank Rate at 3.75% in a split MPC vote as rising energy prices linked to Middle East tensions threaten inflation. Six members vote to hold, three call for a hike to 4%. Inflation is expected to rise later this year before easing toward the target.
July saw only modest 0.1% month-on-month growth in UK house prices, with annual growth slowing to 1.8%. Affordability remains a challenge as mortgage rates rise amid geopolitical tensions. Northern Ireland leads price gains while the south and London lag. The Bank of England cautions inflation pressures could rise if the Iran conflict persists.
Mortgage costs are drifting higher amid rising swap rates and gilt yields driven by inflation and geopolitical tensions. Homebuyers are urged to fix rates now as remortgaging comes due for hundreds of thousands in 2026.
Inflation in the UK has stayed elevated, driven by higher fuel and airfares, with analysts signaling the Bank of England will hold rates at 3.75% for a sixth straight meeting. A softer labour market and rising energy bills are shaping expectations for future moves.