The Money Brief #16 - 3 August 2026

One question runs under everything this week: where does the money come from? The Bank of England will not cut rates, so your savings keep winning and your mortgage keeps waiting. Britain’s banks and oil giants just booked billions from the very turbulence squeezing your budget. The millionaires are leaving the UK. And the new government is being told, loudly, that it needs to raise more tax. Five threads, one question. Grab your Monday coffee. Let me translate.

On Thursday, the Bank of England left its base rate at 3.75% for the fifth meeting in a row. That was expected. What matters is how the vote split.

Of the nine people who set the rate, three voted to RAISE it, to 4%. That is the highest number pushing for an increase in over a year, and it has grown three meetings running: one dissenter in April, two in June, three now. The people who actually decide your interest rates are increasingly leaning the wrong way for borrowers, and it is worth understanding why.

The Governor, Andrew Bailey, held the line. He said the decision was right because “global conditions look more uncertain and inflationary, while domestic conditions are more benign,” and he was unusually blunt about the speculation: “do not leave this room thinking the Bank of England is edging towards a hike.” The three who dissented see it differently. One of them, Megan Greene, pointed out that inflation has now sat above the Bank’s target for roughly five years, and argued that a “proactive hike” now might stop higher prices becoming permanent. Put simply: the Bank is holding its nerve, while a growing minority thinks waiting is the riskier bet.

The Bank also published fresh forecasts, and here is the payoff to what we told you a fortnight ago. It now expects inflation to peak at 3.2% at the end of this year before falling back below target by early 2028. And, tellingly, those forecasts now assume the market is right that rates could rise up to twice by 2027. The expectation of cuts, which the whole country was working with at the start of the year, is gone.

What it means for you. There is no rate relief coming for borrowers in the near term, and the savings window we flagged last week stays open, because savings rates are priced off these same expectations. If your fixed mortgage deal ends soon, the direction of travel is still upward. The next decision lands on 17 September.

Sources: Bank of England (Monetary Policy Report and minutes, 30 to 31 July 2026); Reuters; CNBC; House of Commons Library.

Here is a puzzle worth a moment. Mortgage rates have been rising, and house prices are flat to falling, as we covered last week. So you would expect people to be borrowing less. Instead, mortgage borrowing jumped in June, according to the Bank of England’s own lending figures.

Why would borrowing rise into a rising-rate, soft-price market? Because of exactly the behaviour we described in the last two editions. When people expect rates to climb, they rush to lock in a deal now rather than risk a worse one later. A wave of buyers and people remortgaging moving early can lift borrowing for a month or two, even while the wider market stays soft. It is not a housing boom. It is a queue forming at the door before the price goes up.

What it means for you. This is a snapshot driven by timing, not a sign that prices are taking off. If anything, it is more evidence of the same story: the market expects higher rates, and it is acting on that expectation. The base rate is unchanged at 3.75%, and most lenders still let you secure a new deal up to six months before your current one ends.

Sources: Bank of England, Money and Credit release, June 2026; Rightmove (July 2026).

A fortnight ago we asked whether Britain’s banks had matched Wall Street’s record quarter. The answer came in this week, and they came close. Lloyds’ first-half profit rose 23%. Barclays made around £5.9 billion for the half year, up from £5.2 billion. NatWest grew too. And the biggest number of all came from oil: Shell more than doubled its quarterly profit to $9.84 billion, its best in four years, as the war pushed energy prices higher. Its chief executive summed up the era in four words: “volatility is the new normal.”

It is worth sitting with the uncomfortable thread there. These record profits were built substantially on the same forces squeezing household budgets all summer: the war, the volatile oil price, the higher-for-longer rates. That is not a conspiracy, and it is not anyone breaking the rules. It is simply how the machine is built: the institutions on the other side of your bills and your mortgage tend to do well when times are hard. Worth understanding, even when there is nothing to be done about it.

One detail on how they keep profits climbing: Lloyds used its results to signal deeper cost-cutting, leaning increasingly on artificial intelligence to run leaner. That is the direction of travel across banking, for better or worse.

Now let us widen the lens, because it has been a while since we looked at the bigger picture that touches your pension. The FTSE 100 is near record ground, around 10,900, lifted by exactly these energy and banking giants. Across the Atlantic, America’s central bank also held rates last week, under its new chair, with its own warning that inflation is not beaten. So “higher for longer” is not just a British story; it is the mood of the whole rich world right now.

For your pension, this matters more than any single share price. A typical workplace pension, the default fund most people are quietly paying into, is spread across hundreds of global and UK companies, so this run has been a reasonably good stretch for most pots. But a word of balance: a good few months built on war and volatile energy prices is not a solid foundation, and past performance never guarantees the next stretch. The useful habit is not to celebrate a good quarter or panic in a bad one, but simply to know what your pension is invested in. Most people have never once looked. Ten minutes with your pension statement is worth more than any market forecast.

Sources: Shell Q2 2026 results (30 July); Lloyds, Barclays and NatWest half-year results (July 2026); Reuters, CNBC, Sharecast; US Federal Reserve (29 July); London Stock Exchange (levels to 1 August).

A quick check across the market. The total value of all cryptocurrencies is holding around $2.15 trillion, with Bitcoin near $63,000 and Ethereum around $1,850, little changed on last week. On the regulation front, the clock we mentioned a fortnight ago is still ticking: from 30 September, crypto firms can begin formally applying to the FCA for authorisation under the new UK rulebook.

This week’s plain-English explainer: “gas fees.” If you have ever moved crypto and been surprised by a charge on top, that is a gas fee. It is simply the fee you pay to have your transaction processed and recorded on the network, a bit like a transaction charge at a bank, except it goes to the computers that run the network rather than to a company. The catch that trips people up is that the fee is not always fixed: when the network is busy, the fee rises, sometimes sharply, because you are effectively bidding for space. On a quiet day a transaction might cost pennies; at peak times, far more. Worth knowing before you move anything.

Sources: CoinMarketCap, CoinGecko, CoinReporter (market data to 24 July 2026); FCA.

Two connected stories this week, and together they explain the tax noise you are about to hear a lot more of.

First, the millionaires are leaving. The number of people in Britain worth more than a million pounds has fallen to around 442,000, down roughly 7% in a year, and the lowest since the 2008 crash, according to the Adam Smith Institute, a think tank. It blames two things: falling property values, which quietly push people back under the million-pound line, and wealthy individuals actually leaving the country after changes to the rules on non-domiciled residents. The Institute calls it “a warning signal.”

It is worth being balanced here, because this is a think tank with a point of view. Some of that fall is not people fleeing at all; it is simply house prices dropping (particularly in London where the most expensive house values have dropped dramatically), which nudges paper millionaires back below the line, and lower house prices are something many people would welcome. But the second part, wealthy residents leaving, is real, and it matters for one blunt reason: a small number of high earners pay a large share of the country’s income tax, the top 1% of earners in the UK pay approximately 29% of the UK tax bill. So if enough of them go, the money has to be found elsewhere.

Which brings us to the second story. The National Institute of Economic and Social Research, an independent forecaster, warned this week that the government will need to find around £24 billion by the end of the decade, or accept real-terms cuts to hospitals and schools, because higher inflation is eating into the value of what it already planned to spend. And so the calls have begun, from economists across the spectrum, for the new Prime Minister to raise taxes.

Here is where our recent editions join up. Burnham floated raising the frozen tax-free allowance, then parked it. He has now also ruled out the bigger overhaul of council tax and stamp duty we walked through a fortnight ago. Every door he closes on one tax makes the pressure on another greater, because the £24 billion does not go away. Where the money comes from is the single biggest money question in the country right now, and we will get the first real answer at the autumn Budget. We will be reading it closely, so you do not have to.

Sources: Adam Smith Institute (millionaire estimate); National Institute of Economic and Social Research (£24bn warning);

Most people can tell you their salary to the pound. Very few could tell you their net worth, even roughly. Yet it is arguably, alongside budgeting correctly, a just as important set of numbers, and working it out is simpler than it sounds. So this week, let us actually do it, and then see how it compares, gently.

Net worth is just one sum: everything you own, minus everything you owe. The one part people forget is the biggest: your pension counts, and for many people in their thirties and forties it is quietly one of the largest assets they have. Here is a worked example, with made-up numbers, so you can see the method.

That is the whole method. Add up everything you own, including your home, your pension, your car, your savings and any investments. Subtract everything you owe: the mortgage, loans, car finance, credit cards, overdrafts. The number you are left with is your net worth. It can be negative, especially early in life or straight out of study, and that is completely normal.

So how do you compare? Here is the median net worth by age in the UK, meaning the person right in the middle of each group, not the average.

Now, three things to hold in mind before you feel anything about your own number, because the context matters more than the figure.

First, we have shown you the median, not the average, on purpose. Look at the gap between the two columns: in every age band the average is far higher than the median. That is because a small number of very wealthy people drag the average upward. The median, the person in the exact middle, is the honest mirror. If you have ever felt behind “the average,” you were probably measuring yourself against a number that a handful of billionaires had quietly distorted.

Second, notice how steeply the numbers climb with age. That is not because older people are more clever with money. It is because the two biggest drivers of net worth, home equity and a pension pot, compound over decades. A 28-year-old sitting “behind” a 48-year-old is not losing a race. They are simply earlier on the same curve. If you are young and your number is small, or negative, that is the expected starting point, not a failure.

Third, and most importantly, this is a map, not a scoreboard. The point of knowing your number is not to rank yourself against strangers. It is that you cannot improve what you never measure. Most people drift through decades without once adding it up, and so they never notice the slow progress, or the slow leak. Work yours out once, write it down, and check it again in a year. That single habit, knowing the number, knowing what debts you carry, is worth more than any comparison to the person in the middle of your age group.

Source: Office for National Statistics, Wealth and Assets Survey. Figures are median and mean individual net worth including pension wealth.

That is your five minutes, and a milestone I am extremely proud of. If this week’s edition made one thing clearer, forward it to someone who would find it useful. It is the best possible thank-you, and it is how a small newsletter grows.

The diary ahead: the Bank of England’s next rate decision is on 17 September, and the autumn Budget is where the big question of this whole edition, where the money comes from, finally gets its answer. We will be reading every line of it for you.

And to the fifty of you who got us here: thank you, again.

Look after your money. It is on your side more than you think.

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Thank you,

Ellis

themoneybrief.co.uk

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