UK Money News This Week: Budget Week Arrives, Inflation Bites and Mortgage Rates Edge to 6%

Week ending Monday 26 October 2026

Most people want the same thing from a week like this: a clearer idea of what might change, and a sensible way to prepare without making a rushed decision. With Chancellor John Healey’s first Autumn Budget due on Wednesday, inflation rising again and fixed mortgage rates hovering around 6%, there is plenty to keep an eye on.

One important note before we begin: Budget measures described as expected, reported or rumoured have not been confirmed unless stated otherwise. We’ll update our understanding when the Chancellor makes his announcement.

1. Budget week: what’s known, and what’s still speculation?

The Autumn Budget is scheduled for Wednesday 28 October. It comes as households and businesses face pressure from higher living costs and borrowing costs, while the government tries to support growth and manage public finances.

A number of possible measures are being reported ahead of the announcement:

• The BBC reports plans for more than £1 billion for social and affordable housing, alongside new borrowing powers for regional mayors (BBC).
• Pre-Budget reports suggest stamp duty changes and capital gains tax rises have been ruled out, with a £2 million mansion tax threshold discussed (Trusted Advisor; Mortgage Introducer).
• A “Your First Home” scheme, potentially involving a 20% government equity loan for new-build buyers, has been reported, but remains unconfirmed (Trusted Advisor).

These are not all settled policy. In particular, don’t make a major financial decision based solely on a reported Budget measure. The BBC has also highlighted the limited room to ease pressures on squeezed households and the challenge of sustaining economic momentum (“no more fat to trim”; Budget analysis).

What it could mean for you: keep plans flexible until the full announcement is available. A headline or leak may not include the eligibility rules, timing or detail that determine whether a change affects you.

2. Inflation is back in focus, and rate expectations have shifted

UK CPI inflation rose to 3.5% in September, above the 3.4% forecast, with higher fuel costs a major contributor (Investing.com).

That is a notable change from the rate-cut cycle many borrowers had been hoping for. Markets are now pricing in roughly a 93–97% chance of a 0.25 percentage-point Bank Rate rise at the Bank of England’s meeting on 5 November, from 3.75% to 4.00%. This is a market expectation, not a decision already made (How the World Works; BlueGamma).

Some forecasters see further pressure ahead. ING expects two rate rises, while some analysts think inflation could peak above 4% (ING; MUFG analysis via investingLive).

A useful way to think about it: mortgage pricing is like a set of layers. The Bank Rate is one layer, but lenders also respond to market expectations and their own funding costs. That helps explain why mortgage deals can rise even before the Bank of England changes its rate.

3. Fixed mortgage rates edge up to 6%

Moneyfacts’ average two-year fixed rate is 5.97% and its average five-year fix is 6.00%, with both up one basis point week on week, according to Mortgage Strategy. Lenders’ individual pricing is mixed, so an average doesn’t tell the whole story. Check the latest Moneyfacts mortgage-rate roundup for current market context.

If your current deal ends in the next few months, it may be worth reviewing your options early. You can often secure a new deal ahead of your expiry date, then review it if circumstances or rates change. A mortgage broker in Bolton can compare options from a range of lenders, including deals that may not be available directly on the high street.

There is also a lending-rule change due on Budget day: the firm-level 15% cap on high loan-to-income lending is being removed, while the market-wide aggregate limit remains. This may give some higher earners and self-employed borrowers more headroom, but it does not guarantee approval; affordability checks still matter (Trusted Advisor).

If you’re weighing up a purchase or remortgage, our mortgage advice service can help you understand the options and next steps.

4. A softer housing market may give buyers more room to negotiate

Rightmove’s October index showed asking prices rising 1.0% month on month to £371,015, but remaining 0.1% lower year on year. Agreed sales were down 8% annually, while sellers were reducing asking prices on around 3,000 properties a day. A 15-year high (Rightmove House Price Index; Reuters via Investing.com; BBC).

That may give prepared buyers more scope to negotiate. Sellers, meanwhile, may need to price realistically from the outset.

In Bolton, the average first-time buyer paid £180,000 in August 2026, up 5.2% from £171,000 a year earlier. The average price for a terraced property was £168,000 (ONS Bolton housing data). These local sale-price figures are not directly comparable with Rightmove’s national asking-price average, but they show why Bolton and the wider North West can remain attractive to first-time buyers.

5. Pensions: distinguish announcements from changes already on the books

Pre-Budget reports suggest pensioners whose only income is the State Pension may be shielded from income tax. The new State Pension is expected to rise beyond £13,000 next April through the triple lock, and reports say the Chancellor has decided against cutting the 25% tax-free lump sum. These are reports ahead of the Budget, not a substitute for the Chancellor’s confirmed policy (The Times; The Telegraph; BBC papers review).

Other changes are already legislated:

• Unused pension funds are due to be included in inheritance tax estates from 6 April 2027.
• Salary-sacrifice National Insurance relief is due to be capped at £2,000 a year from April 2029.
• The Cash ISA allowance for under-65s is due to fall to £12,000 from April 2027.

See the Hargreaves Lansdown Budget tracker and Guardian explainer for more detail. Pension tax relief changes are still rumour; MoneyWeek explains why acting on Budget rumours can be risky.

A pension review can help you understand how your retirement income, tax position and estate plans fit together. You may find our pension and retirement calculator a useful starting point. As one client put it: “Ashley was able to show me all the options available to me and make things very clear.” Pamela, pension client (client testimonials).

6. Businesses wait for the Budget, while costs remain in view

The government says red-tape cuts and extended import tariff suspensions will save businesses £800 million (GOV.UK). Ahead of the Budget, business groups are calling for measures including no rise in corporation tax, lower employer National Insurance for under-25s and an extension to 20% hospitality business-rates relief (BBC).

Uncertainty is affecting decisions: a survey found 54% of small businesses are delaying major investments until after the Budget, while 86% fear damaging announcements (Novuna; Credit Connect).

For business owners, it may help to:

• Map cash needs over the next three to six months.
• Stress-test plans against higher borrowing or employment costs.
• Separate essential spending from investments that can wait for confirmed details.
• Review personal and business protection, as well as longer-term savings plans.

A practical plan for Budget week

For individuals

• Check when your mortgage deal ends and review options early.
• Keep enough accessible cash for planned costs; avoid committing to a major move based only on Budget rumours.
• Review pension arrangements, especially in light of the legislated April 2027 inheritance tax change.
• Consider whether your savings, investments and protection still match your needs.

For business owners

• Update your short-term cash-flow forecast and test different cost scenarios.
• Note which decisions depend on Budget announcements, then revisit them once the rules are clear.
• Avoid delaying every investment by default: compare the cost of waiting with the likely benefit of acting.

Budget week can bring noise as well as useful information. We’ll know more after Wednesday’s announcement; until then, steady preparation is usually more helpful than a hurried reaction.

Thomas Whiting Ltd offers independent financial advice in Bolton and remotely across the UK. You can explore our services for investments and tax planning, pensions and retirement planning, mortgages and life insurance and protection. Get in touch to arrange an initial chat.

Important information: This article is for general information only and is not personal financial advice. Tax rules and allowances can change, and their impact depends on individual circumstances. Investments can go down as well as up, and you may get back less than you invest. The value of property can fall as well as rise. Your home may be repossessed if you do not keep up repayments on your mortgage.