A central banking policy body
The ONS has shown wage growth in the private sector has slipped below 3% for the first time since 2020, with three-month vacancies dropping to 712,000. Unemployment remains at 4.9%, payroll numbers fall slightly, and market signals suggest softening conditions ahead as pay growth in the public sector keeps overall earnings above inflation.
The central bank has kept the policy rate steady, citing price stability and a steady growth outlook amid global risks. Domestic growth remains solid, while inflation remains within the target band despite recent upticks.
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.
A mix of mortgage rates remaining elevated and inventory growth is shaping US and UK housing markets. Cash sales have cooled, financed buyers are gaining ground, and prices show modest changes in several markets. Analysts warn of continued affordability challenges and potential further rate-related pressure.
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.
Lloyds Bank has reported that UK house prices have fallen 0.4% year on year in August, marking the first annual decline since November 2023. The typical UK price is 298,468 pounds, with monthly changes showing a 0.2% decrease in August after July. Experts say prices remain higher than pre-pandemic levels, but affordability pressures persist across regions. Analysts forecast ongoing subdued activity in the coming months as borrowing costs and geopolitical tensions weigh on sentiment.
Global central banks have tightened policy in response to a surge in energy prices and sticky inflation. The US Federal Reserve has raised its policy rate to 3.75–4.00% and signalled further hikes; the ECB has lifted its key rate to 2.50%; the Bank of England has held at 3.75% but warned higher energy costs will force future rises. Markets are repricing yields and mortgage costs are rising.
A run of fresh data shows the UK labour market remains resilient despite signs of cooling. Payrolls edge down; unemployment holds at 4.9%; wage growth remains mixed across private and public sectors, with vacancies at a post-pandemic low.
Inflation has climbed to 3.1% in August, driven by higher fuel prices and airfares, with energy bills expected to push prices higher in October. The ONS notes some items cooled, but the trend points to further gains in the months ahead as energy pressures persist.
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.
UK housebuilders have surged as ministers reveal a new equity-loan plan to aid first-time buyers, with income and price caps shaping investor enthusiasm. Analysts say the scheme could re-rate the sector, though practical uptake remains uncertain.