October National Update

Economy: 

• Inflation rates: The current inflation rate is 3.1%, up from 2.9% the previous month. Inflation remains above the Bank of England’s 2% target, with wider pressure from energy costs and global uncertainty continuing to feed into the outlook. 

• Interest rates: UK interest rates have been held at 3.75%, with the Bank of England voting 6–3 to maintain the rate in September. Three members voted for a further 0.25 percentage point increase, showing inflation concerns remain. 

• GDP growth: GDP growth for Q2 2026 was revised up to 0.5%, from the previous estimate of 0.4%, following 0.6% growth in Q1. 

• Pound sterling: Sterling strengthened towards the end of September following the upgraded GDP figures, reaching around $1.33 against the US dollar and a six-week high against the euro. 

• House prices: UK house prices fell by 0.2% in September, with annual growth slowing to 0.8%, down from 1.6% in August. The average home now costs around £274,251, according to Nationwide data. 

• Unemployment rate: The unemployment rate remained at 4.9% in May to July 2026, broadly unchanged on the previous quarter but higher than a year earlier. 

Activity and bills in Parliament:  

• Social Housing Bill: The Social Housing Bill completed its stages in the House of Lords and had its first reading in the Commons on 2 September. The bill is focused on social housing regulation and will now be considered by MPs. 

• Social housing and homelessness reforms: The government confirmed further amendments to the Social Housing Bill, including new measures to strengthen homelessness prevention and protect existing social housing stock. 

 Other planning news:  

• Statutory consultee reform: Following the government’s August response to the statutory consultee consultation, a written ministerial statement in September confirmed that reforms will proceed for Active Travel England, National Highways, Historic England and the Mining Remediation Authority. The changes are intended to reduce the number of applications requiring statutory input and speed up decision-making. 

• Affordable homes funding: The government announced a £21.8m capacity funding boost to help councils bring forward more affordable housing, including support for council housebuilding and graduate planners through Pathways into Planning. 

• Housing approvals fall: New figures show planning approvals for new homes have fallen to their lowest level since 2012, with 214,515 homes granted permission in the year to June 2026. This adds further pressure around the government’s 1.5 million homes target. 

• First-time buyer support: The government is expected to bring forward a new first-time buyer support scheme, intended to stimulate demand for new-build homes after Help to Buy ended in 2023. The detail of the scheme will be important, particularly around price caps and regional affordability.