The Money Brief #11 - 29 June 2026

This week has been a loud headline week without much impact to your wallet. The Prime Minister announced he is stepping down, and yet the cost of your mortgage barely flinched. The quieter action was in a few letters about tax and a bill that lands on Wednesday. Grab a coffee. Let me translate.

On Monday, Prime Minister Keir Starmer announced he would resign, triggering a contest to replace him. A new leader is expected by September at the latest, with Andy Burnham the early frontrunner. A huge political moment. And yet the markets barely moved.

Here is why that is the interesting part. The pound dipped only slightly against the US dollar, to around $1.32 (the number of dollars one pound buys), and it had already drifted about 3% lower since February. Government borrowing costs, the yields on UK bonds called gilts, edged down to a two-month low in the days that followed. The FTSE 100 finished the day roughly flat.

The reason is a phrase you will hear a lot, and it is this week’s One Thing in spirit: the change was largely “priced in.” Investors had watched confidence drain for months, through heavy local election losses in May and a string of ministerial resignations. The government also looked set to miss its flagship promise to build 1.5 million homes this Parliament. Independent forecasters at Savills and the Office for Budget Responsibility, and the fact-checkers at Full Fact, all judge it well off track, with only around a fifth of the target delivered so far. By the time the resignation actually came, the market had already done its worrying.

So what would move things from here? Not the personality, but the policy. The thing markets watch most closely is whether the next government keeps a tight grip on borrowing, and crucially who becomes the next chancellor. If that person is seen as a safe pair of hands, gilts stay calm and so do mortgage rates. If not, borrowing costs can rise quickly. We saw exactly that in the autumn of 2022, when an unfunded plan sent gilt yields spiking within days.

Put simply: a Prime Minister leaving made the front pages, but it is the bond market’s verdict on the next one’s spending plans that will quietly shape your mortgage. The next interest rate decision is 30 July.

Sources: Reuters, IG, Bloomberg, Savills, OBR, Full Fact (June 2026).

Here is the part that did not make the headlines. While the politics played out, fixed mortgage rates kept drifting gently down.

Remember the machinery we explained last week. Fixed mortgages do not follow the Bank of England’s base rate directly. They follow swap rates, which shadow the yield on government gilts. And gilt yields fell this week to around a two-month low, helped by two things: the easing political uncertainty, and weak economic data. A closely watched survey of UK business activity, the PMI, pointed to the economy shrinking for a second month running. When the economy looks soft, markets expect rates to stay lower, and that pulls fixed deals down.

So several big lenders have continued trimming their fixed rates this month. If you are on a tracker, this week’s events change nothing directly: your rate moves with the base rate, which holds at 3.75% until at least 30 July.

What it means for you. The direction of travel on fixes has been gently downward, but it is the bond market doing the work, not the Bank, and it can turn fast. The biggest risk to that is the fiscal question we just covered: a new chancellor seen as a bigger spender could nudge borrowing costs, and fixed rates, back up. If your deal ends in the next six months, it may be worth understanding your options now rather than later.

Sources: Bank of England, Moneyfacts, lender announcements, Trading Economics (PMI), June 2026.

Two quick things on markets, both about looking beyond the UK.

First, the pound. A softer pound is not all bad news for your pension. Around 75% of the FTSE 100’s earnings come from overseas, much of it in US dollars, so when the pound falls those foreign earnings are worth more in sterling. The same goes for the global and US funds most UK pensions hold: a weaker pound can flatter their value in pounds. The catch is that it works in reverse too, so if the pound recovers, some of that boost unwinds. It is a quiet force that moves your pension as much as the headlines do.

Second, a part of the world that just had a blockbuster year, and that your pension might barely touch. Emerging markets, which means the stock markets of faster-growing economies like South Korea, Taiwan, India, China and Brazil, rose around 50% in dollar terms over the past year, with South Korea’s market up even more. For comparison, the US S&P 500 rose about 17% over 2025.

Why might you have little of it? Most workplace pension “default” funds are weighted by company size, which tilts them heavily towards the giant US market, so emerging markets are often only a small slice. The run was driven partly by a weaker dollar (the same currency story as above), cheaper share prices than America’s, and demand for the Asian chip-makers powering the AI boom.

The honest other side, because there always is one. Emerging markets are volatile and have had long flat or losing stretches: most investors were barely in them and missed last year’s gains. The index is also surprisingly concentrated, with one Taiwanese chip-maker alone making up more than a tenth of it. And a big jump after the event is exactly when chasing it has historically burned people. Past performance tells you nothing about what comes next. None of this is a nudge to buy. It is simply worth knowing what your pension does, and does not, hold. You can usually check the regional mix in your pension’s fund factsheet, and MoneyHelper or an adviser can talk it through.

Sources: InvestEngine, MSCI / Investing.com, State Street, Lazard (June 2026).

A quick market check, because the mood is best read across the board, not from one price.

The picture has softened since last week. Bitcoin recently touched its lowest level since September 2024 before steadying, and the broad crypto market is down roughly 30% since the start of 2026. As ever, the same coins that can rise fast can fall just as hard, which is the whole point of the warning below.

Crypto assets are high-risk and largely unregulated in the UK. Values are extremely volatile. You could lose all the money you invest. This is not investment advice. Never invest more than you can afford to lose.

Two cost-of-living updates that hit close to home.

First, energy. From Wednesday 1 July, the Ofgem price cap rises by 13%. You will see this reported as around £221 a year extra for a typical household, but that figure needs a footnote. The cap is reset every three months, and this one only sets prices from July to September. So £221 is an annual-equivalent number, what you would pay over a full year if this level held for twelve months, not what actually lands on your summer bills. And because we use far less energy in summer, the real extra over these three months is much smaller. The rise is confirmed, but the headline overstates the near-term hit.

Two more things worth knowing. First, do not be fooled by a softer-looking headline: Ofgem has also changed its definition of a “typical household,” which makes the new figure read as £1,663 a year against the old £1,862 for the same prices. The yardstick changed, not the direction, and the unit rates you actually pay are still up 13% (the cap limits the price per unit, not your total bill, so your usage still decides what you pay). Second, the bigger question is October. The cap resets again on 1 October, with the new level announced on 26 August, and that is when any rise would really bite, because winter is when we use the most energy. So the honest summary: bills tick up for the summer, and whether this becomes a real squeeze depends on the October cap, not this one.

Oddly, this rise is landing just as oil prices fall. Brent crude, the main global benchmark, has dropped to around $72 a barrel, its lowest since February, as Middle East tensions eased. Good news in theory. But you will have noticed it has not reached the pumps in the same way.

When the conflict pushed crude up sharply in the spring, pump prices shot up almost at once. Now crude has tumbled, the pumps are crawling back down far more slowly. The latest official figures put average petrol at around 153p a litre and diesel at about 172p. Both are easing, but only by a penny or two a week, and both sit well above the roughly 135p and 143p they were at before the conflict. Regulators even have a name for this pattern: prices that rocket up and feather down. The same goes for your energy bill, which reflects the spring’s higher wholesale prices, not today’s cheaper oil. So the relief from falling crude, if it lasts, takes weeks or months to reach you, and rarely as fast as the rise arrived.

Second, a sign of the strain. Unpaid council tax in Britain has now reached a record £9.3 billion, up about £1 billion in a single year. Council tax is now the second most common type of debt among people seeking help from the charity StepChange. With the average Band D bill in England now £2,392, up almost 5% this year, it is one more fixed cost climbing faster than wages. If you are struggling with it, council tax is treated as a “priority debt,” so it is worth acting early. Free, non-judgemental help is available from StepChange, National Debtline and Citizens Advice.

Sources: Ofgem (27 May 2026), RAC Fuel Watch / DESNZ weekly road fuel prices, CMA, Trading Economics, Reuters, Credit Connect, StepChange (June 2026).

You may have seen alarming headlines this week about a “22% tax on ISAs.” Let us clear it up, because the reality is far narrower than the panic suggests.

First, what an ISA is. An ISA, or Individual Savings Account, is simply a wrapper that lets your savings or investments grow free of UK tax. You can pay in up to £20,000 a year. A cash ISA works like a savings account; a stocks and shares ISA holds investments. Normally you pay no tax on the interest, growth or dividends inside one.

So what is actually changing? From April 2027, a 22% charge will apply to one specific, narrow thing: the interest earned on uninvested cash that is left sitting inside a stocks and shares ISA. That is it. It does not touch your investments, your growth, or your dividends. It is an anti-avoidance rule, designed to stop people using an investment ISA as a back-door cash account, because the separate cash ISA limit is being cut to £12,000 for under-65s. The charge is collected by the ISA provider, not you, and anyone aged 65 or over keeps the full £20,000 cash allowance.

Why it matters to you: if you hold a normal stocks and shares ISA that is actually invested, this changes nothing for you. The scary headline describes a rule that affects idle cash, not your investments. Knowing the difference saves you a needless worry, but also arms you with the information to act accordingly, and that is the whole point of this section.

Not advice, just the facts behind a headline that is frightening a lot of people for no reason.

Source: HMRC ISA reform factsheet (23 June 2026).

That is your five minutes. If a change of Prime Minister, an energy price cap change, or that “22% ISA tax” headline made clear has been useful to read, forward this on. It is the best way we can continue to educate and arm as many people with the information they need to take control of their finances.

Coming up next week, we will dig into two stories taking shape: a possible shake-up of council tax, with a new property tax that could replace it, and the quiet way frozen tax thresholds are about to start taxing the state pension itself. Plus the Bank’s next move on 30 July, and who lands the job of chancellor.

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

Follow us between briefs for mid-week updates and the data points worth knowing:

Thank you,

Ellis

themoneybrief.co.uk

The Money Brief. Not financial advice. The Money Brief provides news and commentary for informational purposes only. We are not FCA-regulated. Crypto and investments can go down as well as up. Always consult a qualified adviser before making financial decisions.

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