June National Update

Economy:

• Inflation rates – As of 8 June, the inflation rate is 2.8%, against the Bank of England (BoE) target being 2%. Inflation is expected to rise in the coming months due to the ongoing Middle East conflict and resulting rising costs for consumer goods and high energy prices.
• Interest rates – The BoE held interest rates at 3.75% at its meeting on 30 April. The next BoE meeting is scheduled for 18 June. Most analysts expect interest rates to rise in the coming months as the impact of high energy prices feeds through to higher prices in the shops. Some analysts have predicted an interest rate rise to 4% by the end of the year, but this is very much depending on the global political environment.
• GDP growth – The economy grew by 0.6% in the first quarter (Q1) of 2026. This was surprising for many analysts, with the growth driven by a 0.8% boost in the services industry. The Chancellor of the Exchequer said that the growth rate showed that ‘the government has the right economic plan’ and that the economy is ‘starting to bear fruit’. The lack of economic stability and continuing wards has hit confidence, and so will impact on growth in the coming months.
• Pound Sterling – Sterling has slightly strengthened against the Euro, currently at €1.16 to the pound (8 June). With the current uncertain geopolitical and national landscape, it is hard to predict where Sterling will go next, but it has remained relatively stable in recent months considering what has been going on. Against the Dollar, the pound has weakened, reaching $1.33 to the pound (8 June).
• House market prices – On 5 June, The Guardian newspaper reported that house prices fell slightly, by 0.1%, in May, while the Halifax reported that the average price of a home rose to £298,806 last month. The Guardian reported that the fall was due to rising mortgage costs and the war in Iran and Israel affecting consumer confidence and demand. The monthly drop in prices came after falls of 0.1% in April and 0.5% in March. Amanda Bryden, the Head of Mortgages at Halifax, said: ‘Property price trends continue to reflect the uncertainty linked to developments in the Middle East’.
• Unemployment rates – The UK unemployment rate rose to 5% in the three months to March this year, from 4.9% in the three months to February. The number of job vacancies also fell to its lowest level in five years. This rise came as a surprise to many analysts, with a slight fall widely anticipated.

Activity and Bills in Parliament:

• Representation of the People Bill – This Bill, currently at the Report stage in the House of Commons, will extend the right to vote to 16 and 17 year olds, as well as reform the law around political donations and political expenditure. The Bill was ‘carried over’ from the last Parliamentary session, 2024-2026, where it reached Committee stage. It is unclear what impact the Bill will have on voting intentions at the next general election or whether the change in law would dramatically affect voter turnout. Scotland introduced voting for 16 and 17 year olds ahead of the 2016 Scottish Parliament elections and it was thought that it might dramatically change elections there at the time.
• Local Government Reform Westminster Hall Debate – 10 June – The Conservative MP for Harborough, Oadby and Wigston, Neil O’Brian, has sponsored this debate at a critical time for LGR in England, with ‘Shadow’ councils (East and West Surrey) now operational following the local elections in May. Reform UK is opposed to LGR and it will be interesting to see what response local Reform UK councillors in areas such as Sussex and Essex, where the party did well last month, give to the continued implementation of the changes.
• The English Devolution and Community Empowerment Act 2026 – This former Government Bill received Royal Assent on the 29 April and will help enable the implementation of LGR in England, including the setting up of combined authorities.

Current affairs:

• Labour Leadership contest/ The Makerfield by-election – 18 June – With the latest polls indicating that it will be a tight race between Reform UK (Robert Kenyon) and Labour (Andy Burnham), this election looks set to be one of the most important in recent years, determining whether there will be a leadership election this year within the Labour party, and so deciding how long the Prime Minister, Sir Keir Starmer, will stay in Downing Street.
• Rising inflation and the ongoing Iran war – The Iran war intensified again on 8 June as Iran and Israel again exchanged fire. With the Strait of Hormuz still almost entirely closed, a key shipping route for oil and gas products remains blocked, putting continued upward pressure on the global oil prices and thus the price of consumer goods and business costs.