Economic research consultancy founded by Ian Shepherdson
Mortgage rates in the United States have eased slightly from their recent peak, while in the United Kingdom markets are positioning for a rate rise by the Bank of England next week. The Guardian reports that UK inflation remains elevated and energy costs are driving pressure on households, with the BOE expected to lift the base rate from 3.75% to 4% in early November. AP News notes a separate pullback in US long-term mortgage rates as bond yields ease, potentially easing borrowing costs for buyers.
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.
GDP has expanded by 0.4% in Q2, driven by services and a hot-weather World Cup boost. Yet growth remains delicate amid high energy prices and geopolitical tensions, with Treasury modelling warning of a slower 2027 if Iran-hostilities persist.
Analysts predict the ONS will show a 0.1% drop in monthly GDP for July, offset by a surge in accommodation and food services. June growth was supported by hot weather and World Cup excitement, but forecasters expect a correction in Q3 as household spending slows and energy costs weigh on utilities.
Inflation has moved higher in August, driven by petrol, diesel and airfares, according to ONS data. The figures have heightened expectations for the Bank of England’s next move as energy-price caps are updated and aviation costs rise.
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.
The ONS has reported that public sector net borrowing reached £18.3bn in August, above City and OBR forecasts, leaving year‑to‑date borrowing at £77.3bn — £8.1bn higher than the Office for Budget Responsibility expected. Higher inflation and rising debt interest have pushed interest payments to record August levels and narrowed Chancellor John Healey’s fiscal headroom before the 28 October Budget.
Diesel prices have surged to new highs in the UK amid global supply disruptions linked to the Iran war and Russia-Ukraine conflict. The US is weighing export bans to ease domestic pain, while Europe and the UK face rising costs and tight supplies. Authorities warn prices will likely rise further as markets react.
China has reported a 4.5% year-on-year GDP growth for Q3, with exports lifting the economy while domestic demand remains fragile. Analysts say the tech sector and AI-related demand underpin the uptick, even as investment and property drag on overall momentum. The government’s target of 4.5%–5% for 2026 appears achievable, aided by export strength and ongoing policy support.