Record household hardship & inflation outlook & more
A record number of UK households are currently unable to afford basic necessities, highlighting the ongoing cost-of-living crisis facing the country. As the government navigates these economic pressures, the Bank of England is expected to maintain current interest rates throughout 2026, despite inflation projected to rise toward 3.5% later this year.
While headline inflation recently fell to 2.6%, core and services inflation remain high, complicating the central bank's path for future monetary policy. This economic climate persists as trade bodies urge the government to prioritize better access to finance for small and medium-sized enterprises (SMEs) to help stimulate growth.
In broader policy developments, the UK government has confirmed its participation in an EU-led framework to provide financial support for Ukraine's defense needs. Additionally, officials are focusing on strengthening governance regarding critical minerals in Africa and advancing new partnerships with ASEAN—a regional bloc of ten Southeast Asian nations—to guide cooperation through 2031.
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