If you are investment planning in Cheshire or Oswestry, it’s worth noting that, with mounting fears of inflationary pressures, interest rates are expected to increase in the coming months as UK economic chiefs attempt to keep them in check.
On September 17, the Bank of England’s Monetary Policy Committee held base rates steady again at 3.75%, but economists are largely agreed that rates are set to climb again later in the year, potentially after their next meeting on November 5. This is in part due to global conditions that have experienced a turbulent 2026 thus far. The markets have been unsettled by a worldwide bond sell-off and higher oil prices. The impact of these is forecast to drive up not only petrol costs, but also wider energy bills this winter.
Some predictions estimate that bills could rise by up to 25%. Investors have calculated that rates will increase from 3.75% to 4.75% by October 2027 and perhaps even as high as 5%. Until the end of 2025, the MPC had been cutting UK interest rates and entered 2026 imagining there might be scope for further reductions, but the Gulf crisis has forced a rethink in strategy. Interest rates are used as a lever to restrict spending and borrowing and tend to be increased when inflation rises and vice versa.
As far as mortgage rates are concerned, leading lenders such as Natwest, HSBC, Santander, Barclays and Lloyds all announced September increases in advance of the MPC’s next meeting.
