Market Update August 2026

Following the Bank of England's decision to hold Base Rate, market attention has shifted towards the broader economic picture rather than focusing solely on future rate decisions. 

Inflation continues to show signs of easing compared to the highs experienced over recent years, although it remains above the Bank's long-term target. As a result, financial markets continue to monitor developments in wage growth, energy prices and global events when assessing the likely direction of interest rates over the coming months. 

Swap rates which play a significant role in determining the cost of fixed-rate mortgages have remained relatively stable but continue to react quickly to economic news and international developments. This means mortgage pricing can change even when the Bank of England leaves Base Rate unchanged. 

The housing market has also remained resilient, with lenders continuing to compete for quality business through product improvements, enhanced affordability models and criteria changes designed to support a broader range of borrowers. 

Overall, the market remains considerably more stable than during the periods of significant volatility experienced over the past two years, although borrowers should continue to expect mortgage pricing to respond to both domestic and global economic developments.