UK
United Kingdom politics, economy, policy, and society
Bank of England holds rates at 3.75% amid housing squeeze
- Interest Rates & Borrowing: The Bank of England has held the base rate at 3.75% for the fourth consecutive meeting, with a 7-2 vote favouring stability over a hike. Policymakers cited the need to balance a cooling domestic labour market against the inflationary pressures of elevated global energy prices linked to Middle East instability. For businesses and households, borrowing costs remain fixed at recent highs, delaying anticipated relief in mortgage and corporate loan markets.
- Housing Market: UK house prices recorded a 0.6% monthly decline in May, bringing the average property value to £278,024 according to Nationwide data. Annual price growth slowed to 1.7%, reflecting a market heavily constrained by sustained mortgage rates and rising household energy bills. Analysts note that deposit requirements and affordability limits continue to suppress buyer demand across most regions outside Scotland and the North West.
- Technology & Venture Funding: The British Business Bank has anchored two new funds from early-stage venture firm Seedcamp, targeting AI-native and software startups from pre-seed through to scale-up phases. Separately, Bristol-based nuclear fusion startup Astral Systems secured £23 million to advance its compact multi-state fusion reactors. The capital will fund efforts to run the reactors at full capacity by late 2026 and produce medical radioisotopes to address fragile global supply chains.
- Workforce & Visas: Home Office data shows a 62% year-on-year collapse in Health and Care Worker visa applications following recent policy tightening and increased compliance enforcement. UK Visas and Immigration has intensified automated data-sharing checks with tax authorities, leading to a record number of businesses losing their sponsor licences over payroll and reporting anomalies. The operational shift requires employers to strictly audit their salary compliance to maintain access to overseas talent.