Interest rate pain ahead and Tiger Mom markets

Yesterday, the Bank of England voted to keep interest rates on hold at 3.75%. The Chief Economist voted to increase rates, but the 8 other members took the less dramatic option of a Hold. For now.

If we read the statement behind the headlines, the Committee make it abundantly clear that they’re razor-focussed on getting inflation back down to 2%. (It’s currently at 3.3%). But oil prices are now around $112 a barrel, compared to about $65 back in January. Household energy costs will rise (the cap is forecast to go up about 12% in July), inflation will almost inevitably go up, and I think it’s likely we will see a rate rise over the summer. Good for savers. Uncertain times for people re-mortgaging. Painful for those of us with debt.

The average 5-year fixed mortgage is about 5% today. If you need to re-mortgage in 2026, it doesn’t hurt to get a quote now, secure an offer, and then you can typically sit on it for 6 months and see what happens.

Wall Street’s Tiger Mom is not impressed

Over in the States, the tech giants reported blistering results this week. Apple made $111.2 billion in the last three months, slightly higher than forecast. People can’t get enough of the new iPhone 17 family, particularly in China.

Microsoft and Meta had harsher reactions. Their earnings were up about 17% compared to this time last year – and they both initially fell around 7% – 10% in response as investors fretted about cloud growth, valuations, AI spend, and regulatory threats. Huge sums are being spent. Microsoft spent about $37 billion in three months. THREE MONTHS! Even worse than my daughter. On capital expenditure, which is mostly about AI data centre infrastructure.

Valuations are high at the moment, which has turned investors into a collective financial Tiger Mom. It takes a hell of a lot to impress her, so don’t be showing up with anything over a 2-hour marathon, or she’ll pack you back to the financial gym.

The AI headlines also overshadow the future for the jobs market. Meta announced they will be laying off about 10% of their staff in May, BUT costs will remain the same. Hmmm. 15-love to the robots.

Not to be outdone, Amazon had a great few months, fuelled by its same day delivery network and Rufus, its AI retail assistant. (Don’t think about this too much, it will make you have an existential crisis about the meaning of life). And their shares went up around 5% in response. They have also announced aggressive AI-related spending which the market accepted, instead of freaking out about it.

New market highs and fresh consumer worry lows

All-in-all, the market reacted positively to very strong earnings results this week, and despite the tuts from Tiger Mom and let’s not forget the ongoing conflict in the Middle East, the S&P 500 hit an all-time high yesterday.

Despite these highs, our data confirm that people are nervous. Net sentiment about the UK economy hit fresh lows in March, lower than it was during Liz Truss’s infamous mini-Budget. And net sentiment about the global economy has plummeted to minus 44%. The High Street is not the same as Wall Street and we’re nervous.

A freebie pension

Lots of our readers still put pensions into the ‘too hard’ basket. I’ll do it tomorrow. Along with painting the fences and sorting out the sock drawer. Today, the largest DIY platform, Hargreaves Lansdown, has announced a special deal for new pension customers which basically means it would be free for a year. Their Ready-Made pension is designed for less confident people who want to get started without the hassle. You can start with just £100. And you’ll pay nothing (for both the pension admin and the investment funds) until April 2027. Worth a look, I’d suggest, for anyone procrastinating about setting up a DIY pension and taking that first step. Putting £100 into a free option for a year is not a bad way to bite the bullet.

We do cover the whole market. If you’d rather shop around and compare more options, you can look at our 2026 Best Buys for pensions instead.

Over and out for this week. I’m a double exam household this summer with GCSEs and A-Levels starting next week. Ooof. At least the French oral is over. Talking to a bored eye-rolling 16-year-old about public transport in French as her fingers itched to get back onto TikTok, was a significant test of my rather limited patience this week. Never again!

Holly