🏦 The economy: the 18 June countdown
The Bank of England decides whether to change interest rates on 18 June. The base rate (the interest rate the Bank sets, which influences almost every other rate in the economy) is currently at 3.75%. Most economists still expect the Bank to leave it where it is, but some softer data this week has nudged the odds slightly toward a cut.
What moved:
- A monthly survey of UK service businesses (covering everything from accountants to hairdressers, officially called the “Services PMI”) suggested activity slowed in May
- Wage growth eased to 4.1%, still above the Bank’s comfort zone but heading in the right direction
- Inflation (how fast prices are rising) is still a touch sticky at 3.3%, above the Bank’s 2% target
What it means for you: nothing changes on your monthly payment yet, but if the Bank does surprise with a cut on 18 June, anyone on a tracker mortgage (where your rate moves up and down with the Bank’s base rate) would see their payment fall quickly. Our guide to mortgage rates explains exactly how the Bank’s decision feeds through to what you pay, and fixed vs tracker explains who’s most exposed.
🏠 The housing market: Halifax confirms the slowdown
Halifax, one of the UK’s biggest mortgage lenders, released its monthly House Price Index this morning. Prices fell 0.4% in May, with annual growth now at just 1.9%, the slowest pace since late 2024.
That’s the second month in a row that house prices have dipped (Nationwide reported a similar fall earlier in the week). The average UK home is now worth around £290,000, and the number of homes being bought and sold is tracking 3% lower than this time last year.
What it means for you: when the market cools, sellers usually become a bit more flexible on price. If you’ve spotted a home you like that’s been sitting on the market for a while, there may be more room to negotiate than there was in spring. Our first-time buyer guide and affordability calculator are good places to sense-check your numbers.
📉 Mortgage rates: another round of cuts
Coventry Building Society, Skipton and HSBC all reduced their fixed-rate mortgage deals this week, joining the cuts from NatWest, Barclays, TSB and Santander the week before.
The sharpest deals right now:
- 2-year fixed: around 4.35%
- 5-year fixed: around 4.42%
- For borrowers with a deposit of 40% or more, some deals are now under 4%
These cuts are partly because lenders are competing harder for business, and partly because they’re pricing in the chance of a Bank of England cut later this year.
What it means for you: if your current mortgage deal ends within the next 6 months, this is a good moment to start shopping around. Once your deal ends, you usually roll onto your lender’s Standard Variable Rate (SVR), which is almost always far more expensive than even a mediocre new fixed rate. Our remortgage guide covers when to start and how to avoid getting caught.
That’s your week. If anything raises a question about your own situation, just drop us a line, or have a no-pressure chat with Debbie at DS Financial.
General information, not financial advice. Figures correct at the time of writing (5 June 2026).
Sources: Bank of England base rate, Halifax House Price Index, Nationwide House Price Index.