The Bank of England’s (BoE) next meeting to determine interest rates is on Thursday 30 July and all eyes will be on the Monetary Policy Committee (MPC) and its members’ response to domestic economic pressures, the ongoing Middle East conflict and the early approach of the new prime minister and chancellor.

The base rate – sitting now at 3.75 per cent after being cut four times last year – impacts business, consumers and taxpayers through everything from mortgages to loans and savings, so what do experts foresee, both this week and beyond?

Will interest rates be cut?

Rates were cut just before Christmas to the lowest point in almost three years and more was expected to come across 2026.

In fact, up until mid-February there was a strong chance of a rate cut in March or April, with an expected second cut later in the summer. But everything changed with the Iran war which has sent oil prices soaring, raising energy costs and with inflation still predicted to rise once more.

While rates were near-zero for a long time after the financial crisis, most analysts and economists now expect the “neutral rate” – how low the bank will cut to and then leave it, where the economy continues to grow but inflation is suppressed – will be higher this time, perhaps 3 per cent.

That means only another three cuts might come in total during this cycle, and as we get closer to that rate, the cuts could be spaced out further.

However, events in the Middle East have thrown those expectations into disarray and there is now real uncertainty which way rates will go in the nearer term, particularly after hostilities resumed recently following a short-lived ceasefire.

Analysts expect the rate to be held at 3.75 per cent for this vote in late July, though some have argued for raising rates earlier this time to head off worse inflation down the line.

Influential factors

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Interest rate decisions take into account multiple factors over long periods of time, as well as expectations about what lies ahead – and 2026 again looks tricky in both regards.

The MPC has nine members, and their votes decide whether the base rate is cut, raised, or kept the same.

Among the elements MPC members will have been looking at are job and wages data, the level of inflation across the UK, and economic growth.

Higher inflation is a reason to keep interest rates up, as that can discourage businesses from investing in new projects or hiring – things that in turn raise earnings and spending power, lifting demand and keeping prices rising even further.

Conversely, fewer jobs and lower wages means less spending power and lower demand for goods and services, which helps to stem any further price rises.

During 2026, economic data has shown salary growth slowing and unemployment rising, though wages are still rising faster than inflation.

These are factors that can argue for interest rates to be lowered, while there are also external factors that can affect the UK, which the government and Bank of England can have little or no control over – like energy price shocks or supply constraints which push prices up.

UK outlook

As well as the domestic situation of higher-for-longer inflation, there has been rising unemployment across the UK. Very slow economic growth is another factor to weigh up.

Now there’s also the possibility of a change of direction to consider with regards to national finances, with new prime minister Andy Burnham appointing John Healey as chancellor.

But the big economic impact this year is still the war in Iran and the surging price in oil and gas, which when sending energy bills higher adds to a return to high inflation, despite June figures showing inflation falling to 2.6 per cent. That is expected to be the low point, before a return to higher figures starting from July data.

“Nothing in this inflation release changes the calculation for the July interest rate decision,” predicted Daniel Mahoney, senior UK economist at Handelsbanken. “Financial markets are now pricing in two rate hikes by March next year, but the relatively weak labour market in the UK along with major uncertainty about the geopolitical situation means the MPC will in all likelihood continues its ‘wait and see’ approach and hold rates at the meeting next week.”

AJ Bell’s Danni Hewson, head of financial analysis, agreed, saying: “For the Bank of England, it’s likely to buy them another month to consider their options. Market expectation of an interest rate hold at next week’s meeting firmed up on release of the data.

“But rate setters will face the real test in September. The vote split and updated forecast will be closely watched for clues about how many hikes may be required to keep the economy in check.”

Elsewhere, it’s worth remembering that with mortgages in particular, many products are priced using future expectations of the interest rate (swap rates), so changes in that market can already be accounted for.

For savers, though, whether or not an immediate cut to variable rates is coming, it’s always worth checking the best offers on the market to make sure your money is earning as much as it can for you.

What about the rest of 2026?

The further into the future we look, the more murky the picture is – and it can change rapidly anyway as we saw last year with tariffs, Budget uncertainty, oil shocks and more. The US repeatedly wavering between ceasefire talks and missile strikes on Iran further muddies the waters.

Markets have wavered wildly recently between expecting only one cut this year and up to three rises occurring if the situation in the Middle East is prolonged.

Currently, the money markets are pricing in almost two hikes, though note that this is not always the same as economists actually expecting the Bank of England will follow suit – as evidenced by that market dropping rapidly once an initial peace deal was agreed between the US and Iran.

The next MPC vote date is on 17 September.

Only about one in seven homes across the UK has consistently increased in value annually since June 2022, according to new estimates from property website Zoopla.

The analysis scrutinised individual home valuations, tracking their performance from June 2021 through to June 2026.

Zoopla specifically focused on comparing a property’s value in June of each year against the same month in the preceding year: for example, checking if a home’s value in June 2022 surpassed its June 2021 valuation.

This detailed examination revealed that just 14 per cent of UK homes – a figure representing over four million properties – had experienced an annual increase in value each June from 2022 to 2026.

While consistent year-on-year growth for individual properties remains uncommon, Zoopla’s broader house price index offers a different perspective.

It indicates that the average UK home value has risen by 15.3 per cent over the past five years, equating to an average increase of £36,100 per property.

The impact of mortgage rate increases

Zoopla said that rises in mortgage rates, affecting borrowers’ costs, will have had an impact over the five-year period.

Richard Donnell, executive director at Zoopla, said: “Housing markets across Northern Ireland, the North and Scotland have seen homeowners keep building equity in their home because the local housing market was less exposed to the affordability pressures that higher mortgage rates bring.

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“For homeowners, this analysis highlights why you cannot rely on national or regional averages when assessing what your home is worth.

“Trends vary by property type and at a hyper local level.

“Understanding whether your local area has consistently built equity or flatlined is essential information, if you want to understand what you can afford to buy next or you are actively planning your next move.”

Aneisha Beveridge, research director at Connells Group, said: “The UK’s housing market has become increasingly fragmented over the last five years.

“The strongest performance has generally come from more affordable markets across the north of England, Scotland and Northern Ireland, where lower price points have helped insulate buyers from higher mortgage rates and supported continued demand.

“At the same time, the pandemic sparked a surge in demand for larger homes in commutable areas outside London, driving strong price growth across much of the south between 2020 and 2022.

“However, as mortgage rates rose and stamp duty incentives were withdrawn, that momentum faded and price growth in many of these markets has since come under pressure.

“Despite these headwinds, our research shows the middle market is still moving.

“Most buyers and sellers are driven by life events rather than short-term house price movements, and for homeowners who typically move every 10 to 12 years, modest annual price falls rarely affect their ability to transact.

“The challenge comes when weak price growth persists for many years.”

Charlotte Harrison, chief executive officer of home financing at Skipton Building Society, said: “Consistent house price growth can help homeowners build equity, but equity alone doesn’t guarantee people can move.

“Our latest Skipton Group home affordability index found the gap between buying affordability and living affordability is the widest it’s been this decade.

“For many households, the challenge is no longer whether their home has risen in value, but whether they can afford the higher ongoing costs of their next property.”

She added: “While sustained house price growth can be positive for existing homeowners, improving access to homeownership remains critical if future generations are to share in those benefits too.”

Nathan Emerson, CEO at property professionals’ body Propertymark, said: “Many purchasers are factoring in the long-term cost of homeownership rather than focusing solely on securing a property quickly.

“At the same time, sellers who price their homes realistically continue to attract strong interest, demonstrating that demand remains resilient where expectations align with current market conditions.”

What the data says

Here are the percentages of homes in regions or nations estimated by Zoopla to have increased in value annually each month of June, covering June 2022 to June 2026 inclusive:

Northern Ireland, 37.9%

North West, 29.7%

Scotland, 22.6%

Yorkshire and the Humber, 22.0%

North East, 20.5%

West Midlands, 19.6%

Wales, 19.1%

East Midlands, 9.8%

London, 4.6%

South West, 4.1%

South East, 3.2%

East of England, 2.6%

Zoopla also identified “top performers” in regions or nations, where property values are particularly likely to have increased each year.

Here are the locations, followed by the percentage of homes estimated to have consistently increased in value annually in each month of June between June 2022 and June 2026 inclusive:

Northern Ireland, Antrim, 60.5%

North West, Dukinfield, 51.1%

Scotland, Bonnybridge, 60.8%

Yorkshire and the Humber, Castleford, 53.6%

North East, Hebburn, 42.6%

West Midlands, Wednesbury, 51.3%

Wales, Tonypandy, 46.6%

East Midlands, Hope Valley, 37.5%

London, Dagenham, 31.6%

South West, Dursley, 15.1%

South East, Bicester, 27.7%

East of England, Witham, 13.3%

The average UK house price increased by 2.7% in the 12 months to May, slowing from a 3.9% annual increase in April, the Office for National Statistics (ONS) has said.

Across the UK, the typical house price in May was £271,000.

Average house prices increased in May to £292,000 (a 2.3% annual increase) in England, £215,000 (4.2%) in Wales, and £196,000 (4.4%) in Scotland.

The average house price for Northern Ireland was £198,000 in the first quarter of 2026 – a 7.4% annual increase.

Within England, the North East was the region with the highest annual house price inflation in May, at 5.9%.

London had the weakest annual house price inflation, with prices there falling by 3.7% annually in May.

This is the ninth month in a row with an annual fall in house prices in London, the report said.

Richard Donnell, executive director of research at Zoopla said: “Political change, the World Cup, a scorching summer and elevated mortgage rates have hit housing market activity this summer.

“Zoopla’s very latest data shows 20% fewer buyer inquiries than a year ago and 7% fewer sales agreed.

“This comes as annual house price growth in the ONS index has already slowed to 2.7% in the 12 months to May. We expect activity to pick up in the autumn as the outlook becomes clearer.”

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The ONS said that the slowing in the UK annual rate of house price inflation was caused by a “base effect” from the aftermath of stamp duty changes in England and Northern Ireland in April 2025, which was similar to stamp duty effects seen previously.

Its report said: “The annual rate slowed in May 2026 because average UK house prices rose by a smaller amount (0.3%) between April and May 2026 than in the same period a year ago (1.5%).”

The average monthly private rent in the UK was £1,388 in June – £44 (3.3%) higher than 12 months earlier – the ONS said.

The figures were released as the ONS also said that the Consumer Prices Index (CPI) rate slowed reach to 2.6% in June, from 2.8% in May.

This was the lowest level since March 2025, and below a 2.7% rate expected by some economists.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Inflation easing to 2.6% is welcome news as far as interest rates are concerned but renewed tensions in the Middle East mean the inflationary threat has not completely rescinded.

“Although the Bank of England is expected to hold base rate again next week, rising swap rates, which underpin mortgage pricing, have led a number of lenders to increase their mortgage rates, with others expected to follow.”

He added: “The higher cost of living is impacting household affordability, which means those buying a home are being careful as to what they are prepared to spend.”

David Hollingworth, associate director at L&C Mortgages said: “The mortgage market had been moving in a positive direction, with lenders gradually reducing rates and giving borrowers improved choice.

“However, that downward momentum has ground to a halt, as uncertainty in financial markets has pushed lenders’ funding costs higher, prompting a growing number to increase their fixed-rate deals.”

He added: “Borrowers shouldn’t feel they have to panic, but they also shouldn’t delay reviewing their options.

“Mortgage rates can move quickly, as we have seen over the past week, so anyone approaching the end of their current deal or planning to buy a home should consider securing a competitive rate sooner rather than later.

“Most lenders will still allow borrowers to switch to a cheaper deal before completion if rates ease again, giving them certainty now and flexibility if the market moves in their favour later down the line.”

Jason Tebb, president of OnTheMarket, said: “Lenders have started increasing their mortgage rates on the back of higher swap rates, but with inflation easing to 2.6% in the year to June, hopefully the Bank of England will hold base rate again at the next meeting.”

Iain McKenzie, chief executive of The Guild of Property Professionals, said: “With more homes available than we’ve seen for some time, purchasers are spoiled for choice, and sellers face much greater competition.

“In this environment, realistic, evidence-based pricing is essential.

“Homes launched at the right price continue to attract interest and secure sales, whereas properties brought to market too ambitiously are taking significantly longer to sell after price reductions.”

Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “Today’s figures are positive for sellers and show that the housing market remains resilient despite domestic and international pressures.

“However, affordability concerns continue to challenge many buyers, particularly first-time buyers.”

Karen Noye, a mortgage expert at wealth manager Quilter said: “For buyers, the key point is not simply what a lender is willing to offer, but what remains comfortably affordable.

“Stretching to the maximum may feel necessary in a competitive market, but it leaves little room for unexpected costs, income changes or future rate volatility.

“Building in a margin for error can help ensure a purchase remains sustainable even if economic uncertainty persists for longer than expected.”

Sarah Coles, head of personal finance at AJ Bell, said the summer house price figures “could be a tough read, reflecting loss of confidence and stretched affordability after the start of the Iran war”.

She added: “Recent mortgage rate rises could send many buyers back into a ‘wait and see’ pattern.”

Nearly two-fifths (37%) of people who are expecting to receive an inheritance from their parents say their own finances depend on it, a survey indicates.

But three-fifths (60%) of those expecting to receive something do not know how much money they are likely to get, according to Aviva.

The insurer said the research raises concerns that many households could be making important financial decisions based on assumptions.

This could be particularly the case where an inheritance is expected to help pay for everyday living costs, clear debts and fund their own retirement, it said.

Some people said an inheritance will help them pay off their mortgage, whole some said they would use the money for their children’s education.

The survey also indicated that only around a third (32%) of people have an up-to-date will and know where it is.

And 7% said their will is up-to-date but they do not know where it is, while one in 10 (10%) said their will is out of date.

Only 13% of adults have a power of attorney in place, rising to 17% of those aged 65 to 74 and a third (33%) of over-75s, the survey of 2,000 people across the UK carried out by Censuswide in January indicated.

A power of attorney allows people to help deal with aspects of another person’s affairs.

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Lorna Whalley, director of Aviva’s adviser platform, said: “The research shows that there is an absence of family discussions around inheritance and expectations which could have repercussions, especially when considering how much potential beneficiaries are relying on inherited money to fund their day-to-day expenses.

“Even though situations can change, it’s important for people to consider the levels of income they will need in retirement, what contingencies need to be in place and, as a result, be clearer with beneficiaries about what they can expect to receive.

“More than half of people (53%) say they don’t know how much money they will need to support themselves through retirement.

“Understanding this is an important step in avoiding being too generous by helping family out to the detriment of their own financial security, or alternatively, thinking they might need more money for retirement than they do.

“A clear understanding of your financial situation and future needs is the building block for open conversations about inheritance and expectations.

“People are relying on inherited wealth to fund essential parts of their lives, but many have no idea how much they are likely to receive.

“This uncertainty could prove disastrous for future financial plans and makes it much harder to take steps now to meet future requirements.”