Personal Money · Friday, 18 September 2026

01 Briefing what happened

The US central bank raised its rate for the first time since 2023. Card interest follows within weeks; savings rates may not.

Personal Money 39 sources

A credit card's rate is tied to the US central bank's rate and moves within a billing cycle or two. A savings rate is set by each bank, and in the last round of rises the biggest US banks barely moved theirs.

3.75%-4%

the US central bank's new rate range, 0.25 points higher

its first rise since July 2023, backed by all 12 voters [2]

$1.38

extra interest a month on the average $6,600 card balance

TransUnion's estimate for this one rise; larger balances pay more [3]

0.5% vs 4.2%

the average US savings rate against the best-paying accounts

Bankrate's January figures; big banks barely lifted theirs in the last rises [5]

7.05%

the average 30-year fixed US mortgage rate on 17 September

0.93 points higher than a year earlier [8]

The lead story — what happened

The US central bank, the Federal Reserve, raised its main interest rate by a quarter of a percentage point on 16 September, to a range of 3.75% to 4%. [1][2]
It was its first rise since July 2023. All 12 members of the committee that sets the rate voted for it. [2]
Its chair, Kevin Warsh, said inflation was too high and had been for too long. US prices rose 3.4% in the year to August. [2][9]
The US war with Iran pushed oil prices up, and the average price of diesel passed $6 a gallon, an all-time high. [9][10]
Most US credit card rates are tied to the prime rate, a benchmark that moves in step with the US central bank's rate. They adjust within one or two billing cycles. [4][5]
TransUnion, a US credit bureau, estimated this rise adds about $1.38 a month in interest on the average card balance of $6,600. [3]
A savings rate has no such tie. Each bank sets its own, and in the last round of rises the biggest US banks barely raised theirs. [5]
In January the national average savings rate was 0.5%, while the best-paying account paid 4.2%. Online banks can pay more because they have no branches to run. [5]
Over the same years the average card rate climbed from 16.16% in July 2021 to 19.62% in January 2025. [5]
A loan with a fixed rate does not change when the US central bank moves. Only variable-rate debt follows. [5]
Mortgage rates rose before the decision. A 30-year fixed loan averaged 6.97% in the week to 16 September, and 7.05% the next morning. [7][8]
Most officials expect at least one more rise this year. President Trump demanded rates of 1% or less, but did not attack Warsh by name. [2][11]

Who is involved

Kevin Warsh

chair of the US central bank since May, appointed by President Trump; led the unanimous vote to raise rates
Donald Trump

the US president; wants rates cut to 1% or less and said so hours after the decision
TransUnion

one of the three big US credit bureaus, which track what people owe; estimated the extra card interest
US banks and card issuers

the firms that set savings rates by choice and card rates by formula tied to the prime rate

How it unfolded

Jul 2023 the US central bank's last rate rise, ending a climb to a 23-year high [2][5]
Dec 2025 a cut leaves the range at 3.5%-3.75%, where it then holds five times [10]
May 2026 Kevin Warsh takes over as chair [10]
Aug 2026 Warsh says the bank has work to do unless inflation falls [12]
16 Sep a quarter-point rise to 3.75%-4% [1]
27-28 Oct the next meeting; futures markets put another rise at about 42% [1]

Where this points

The next test is the US central bank's meeting on 27-28 October, where futures markets put the chance of another quarter-point rise at about 42%, and whether big banks lift savings rates before then. [1]

What is pushing on the whole day

The bar and the word are our reading of how hard each one is pushing today. The arrow is where it is heading. The evidence is in the stories below.

Borrowing costing more High↑

The US central bank raised its rate for the first time in three years. [1] A 30-year US mortgage passed 7% on 17 September. [8] In England, a ruling let five water companies charge more partly because their own loans cost more. [25][29]

Pay falling behind prices Building↑

Average US hourly pay, after prices, fell for a second quarter in a row between April and June. [14] The poorest third of UK households are forecast to end the decade with less income than they started it. [21] US food prices are up 33.4% since March 2020, against a 31.9% rise in hourly pay. [17]

The war in the price of food and travel High↑

US airfares were 23.4% higher in August than a year before. [19] In March, Britain's biggest farmers' union warned that dearer gas would raise the price of greenhouse vegetables. [23] Diesel in the US passed $6 a gallon for the first time. [9]

Bills that rise on a schedule Steady→

Many English leases double the ground rent at fixed intervals, which can make a flat impossible to sell. [30] England's water regulator set bill rises for five years at once, most of it front-loaded. [25] US card rates follow the prime rate without anyone deciding. [4]

Workers paid less than they are owed Building→

Two thirds of temporary visa workers surveyed in Australia were paid less than the law requires. [37] Australia made wage theft a crime in 2025 and has not yet prosecuted anyone. [36]

The rest of the day

14 more stories on this beat.

Each with its own sources. None of these is a link to the story above.

02
US pay slips behind prices again

Average hourly pay in the US, adjusted for prices, fell between April and June, the second quarterly fall in a row, the Brookings Institution's pay tracker showed in August. [14] That is true whichever of the two main price measures is used. [14] Most measures of pay after prices are still above where they were at the end of 2019. [14] NPR reported that prices have been rising faster than average wages since April, as the war with Iran pushed fuel prices up. [9]

Why it matters — A pay rise usually comes once a year, so a worker absorbs every month of faster prices before it arrives. A card's interest, by contrast, moves within weeks of a US central bank decision.
03
Nearly half of US households fell short in 2024

In 2024, 45.5% of US households did not earn enough to cover basic necessities, a Brookings Institution study found. [15] It added up the cost of housing, food, childcare, health care and transport in every county and compared it with local incomes. [16] More than 60% of households made ends meet in Colorado, the Dakotas, New Hampshire and Washington DC. [16] In Hawaii only 39% did. [16] Wages rose 1.3% after inflation in 2024, according to the Census Bureau. [15]

Why it matters — It measures affordability from the income side as well as the price side. Its authors argue costs will not feel affordable unless wages rise substantially. [15]
04
US groceries steady, restaurant meals dearer

US food prices were 2.7% higher in August than a year earlier, according to the consumer price index. [17] Grocery prices rose 2.2% over the year, while meals out rose 3.4%. [17] Eggs, which soared during bird flu outbreaks in late 2024 and early 2025, were 23% cheaper than a year ago. [17] Beef was up 5.9%. [17] In July, Walmart, the biggest US retailer, cut prices on beef, corn and other items as shoppers pulled back. [18]

Why it matters — Food is 13.4% of the US price index, second only to housing. [17] Since March 2020 food prices have risen 33.4% and average hourly pay 31.9%. [17]
05
US travel costs 9% higher than a year ago

Travel in the US cost 9% more in August than a year earlier, according to NerdWallet's travel price index. [19] The index combines government price data on flights, hotels, meals out and car hire. [19] Airfares alone were up 23.4% on the year, while hotel rooms were up 2.9%. [19] All prices together rose 3.4% over the same twelve months. [19] Over ten years, airfares have risen 15.6%, less than prices in general. [19]

Why it matters — Travel costs rose at more than twice the pace of prices in general this year. [19] The jump is recent: over ten years, airfares rose less than everything else did. [19]
06
What a minimum life costs in the UK

A single adult of working age in the UK needs to earn 31,500 pounds a year to reach a minimum acceptable living standard in 2026, the Joseph Rowntree Foundation, a poverty research charity, found. [20] A couple with two children needs 77,400 pounds between them. [20] For the first time, the budgets assume private renting, because groups of the public said social housing was no longer a realistic option. [20] A lone parent working full time on the National Living Wage reaches 67% of the minimum. [20]

Why it matters — Renting privately adds about 5,000 pounds a year to what a single pensioner needs. [20] Out-of-work benefits cover between 24% and 36% of the minimum after housing costs. [20]
07
UK's poorest third forecast to end the decade poorer

The poorest third of UK households are expected to have lower incomes in 2029 than in 2019, the Joseph Rowntree Foundation calculated from official forecasts. [21] Average household income after housing costs in 2029-30 would be only 160 pounds higher than ten years earlier, a rise of 0.4%. [21] April 2026 is projected to be the decade's high point, with incomes falling by 580 pounds over the next three years. [21] Those forecasts were made before the conflict with Iran. [21]

Why it matters — Housing takes about a third of income for the poorest households, against a tenth for the richest. [21] So a rise in rent or bills takes a bigger bite from the people with the least to spare.
08
UK food prices up by almost half since 2021

UK food prices are on track to be about 50% higher than at the start of the cost of living crisis in 2021, the Energy and Climate Intelligence Unit, a research group, reported in May. [22] Beef rose 64% and olive oil more than doubled. [22] The Bank of England expected food inflation to reach 7% by the end of the year. [22] The fighting in the Middle East raised oil and gas prices, which feed into transport, fertiliser and greenhouse heating. [23]

Why it matters — Adjusted for average wages, food still costs 11% more than in 2021. [22] Families on the lowest incomes have little left to cut except food, the Food Foundation charity said. [22]
09
England's water bills climb every April to 2030

Ofwat, the water regulator for England and Wales, allowed companies to raise bills by 36% between 2025 and 2030, most of it in April 2025. [28] Bills rose another 5.4% on average in April 2026. [24] Southern Water's average bill went from 704 to 759 pounds, after a 47% rise the year before. [27] Five companies that appealed won an extra 2.2% on average. [25] The appeal body, the Competition and Markets Authority, said one reason was that interest on the companies' own loans had risen. [29]

Why it matters — Households cannot choose their water supplier, so the whole rise lands on them. [25] Complaints to the Consumer Council for Water rose 50% to more than 16,000 in 2025, mostly about affordability. [28]
10
MPs want England's ground rent cap sooner

A committee of MPs has asked the UK government to bring in its planned 250-pound yearly cap on ground rents in late 2027, not late 2028. [31] Ground rent is a yearly fee a leaseholder in England and Wales pays the freeholder who owns the land under their flat. [31] About 3.8 million homes still pay it, more than 600 million pounds in 2025. [32] Many leases double it or raise it with inflation at fixed intervals. [30] The UK government plans to cut it to zero after 40 years, and the committee asks why that cannot take 20. [31]

Why it matters — A lease that doubles the rent can make a flat unsellable, because lenders will not offer a mortgage on it. [30] The Residential Freehold Association, which speaks for professional freeholders, calls the cap wholly unjustified. [30]
11
Service charges leaseholders cannot control

Leaseholders in England also pay yearly service charges for repairs to their building, set by a managing agent the freeholder picks. [33] One London leaseholder told the BBC her charges were about 2,600 pounds a year when she moved in, and one year they topped 5,400 pounds. [33] Another bought a flat in 2020 expecting building works to cost 4,500 pounds; the bill grew to 40,000 pounds and she cannot sell. [34] The housing minister said a ban on new leasehold flats is unlikely before the next election. [35]

Why it matters — Reform plans would abolish forfeiture, where a freeholder can take a home over a service charge debt above 350 pounds. [32] Until then, the owner of the flat pays bills they have no say in. [33]
12
Australia's wage theft law, no prosecutions

Deliberately underpaying workers became a crime in Australia on 1 January 2025. [36] In the first 15 months the Fair Work Ombudsman, the Australian government's workplace watchdog, reported two criminal investigations and no prosecutions. [36] Enforcement relies on workers complaining, and the most vulnerable complain least. [36] One survey found a third of workers aged 18 to 30 were paid well below the minimum wage. [36] A Senate inquiry and a separate government review are examining the law. [36]

Why it matters — In the 7-Eleven case of 2015, workers were repaid more than A$170m while penalties came to about $1.8m. [36] A law nobody is prosecuted under changes little for the worker who is short-changed.
13
Two thirds of visa workers underpaid in Australia

Two thirds of temporary visa holders working in Australia were paid less than they were legally owed, a survey of almost 10,000 of them by the Migrant Justice Institute found. [37] About 80% were international students. [37] More than a third were hired as independent contractors, four times the national rate, and 85% of those earned less than a casual employee would. [37] Cash-in-hand pay fell from 44% in 2016 to 23%. [37]

Why it matters — The researchers suspect many cafes, shops and cleaning firms hire migrants as contractors to avoid minimum wages, extra pay for late hours and pension payments, which breaks the rules on who counts as an employee. [37] They call it a business model, not a few bad employers. [37]
14
Nigeria's new tax rules exempt basic goods

Nigeria's tax reforms for 2026 charge no value added tax, a sales tax, on basic food, education, medicines, baby products and sanitary pads, BBC News Pidgin listed. [38] Rent is exempt from it. [38] Salary payments and electronic transfers under 10,000 naira are exempt from stamp duty, a tax on transactions. [38] Small companies, with a turnover up to 100 million naira and limited fixed assets, pay no company tax. [38]

Why it matters — A sales tax takes a bigger share from a poor household, because more of its money goes on food and basics. Removing it from those goods reaches families every time they shop.
15
In Turkiye, rents kept prices rising

An International Monetary Fund study of Turkiye found that prices for services, with rent playing an important role, have kept rising much more stubbornly than prices for goods since late 2021. [39] When the lira stabilised at the end of 2022, goods inflation fell. [39] Services inflation kept climbing. [39] A fall in the currency moves service prices only about a tenth as much as it moves goods prices. [39]

Why it matters — Goods prices react quickly when the currency moves. Service prices, rent among them, kept climbing, so tenants in Turkiye went on paying more after the lira calmed. [39]

02 Lesson why it matters

Why a card's rate moves in weeks and a savings rate takes months

A card's interest rate is usually tied to the US central bank's rate, so it follows by itself. A savings rate moves only when a bank decides to move it.

The twist

A price tied to a written rule moves by itself. A price that someone has to choose to change moves only when not changing it would cost them customers.

How it works

The US central bank raises its main rate
A card rate is written as the prime rate plus a margin, so it follows within one or two billing cycles
A savings rate has no such link: each bank chooses it
A bank lifts its savings rate when it fears savers will move their money
Most savers stay where they are, so the biggest banks keep paying little
The borrower pays more within weeks; the saver waits, or moves

The same force, elsewhere today

Where this chain is also running, in today's other stories.

England's water bills climb every April to 2030

the regulator fixed the rises for five years in advance, and an appeal added more because the companies' loans cost more, with no household asked
US pay slips behind prices again

pay is a price an employer has to choose to raise, usually once a year, so the months of faster prices come first
MPs want England's ground rent cap sooner

a lease that doubles the rent every set number of years moves on its own, and the leaseholder has no say until a law changes the rule
US groceries steady, restaurant meals dearer

Walmart chose to cut some prices only once shoppers began pulling back, the same step a bank takes with a savings rate when it starts losing savers

Where you've seen this

Insurance renewals

the new premium arrives automatically each year, while a lower price usually has to be asked for

Subscriptions

a price rise written into the terms starts on its date, while a discount lasts only as long as the company offers it

Renting a home

a landlord can raise the rent at renewal, while the tenant's pay rise waits for an employer's decision

The catch

It weakens where people do move their money. Online banks were paying about 4.2% in January because they compete for savers, so a savings rate can follow the US central bank when a bank has to fight for deposits.

And the whole of it

Many households owe money on a card and keep savings in a bank at the same time. After this rise the card side changes by itself within weeks, and the savings side changes only when a bank decides it should. Nobody holding one account can see when that decision will come.

03 Truth what's really going on

What is really going on

The US central bank raised its rate on 16 September to fight prices pushed up by the war with Iran. For a household, that rise reaches a card balance within one or two billing cycles. It reaches a savings account at a big bank only if the bank chooses, and in the last round of rises the biggest banks barely moved. [1][4][5]

Why it works on us — A quarter point and $1.38 a month sound too small to matter, and one small step hides that most officials expect at least one more this year. [3][2]

Who gains

Card issuers in the US — Most card rates are tied to the prime rate, so the rise lifts interest on existing balances within one or two billing cycles without any new decision. [4][3]
The biggest US banks — They set savings rates by choice, and in the last round of rises they kept the national average near 0.5% while charging more on loans. [5]
Water companies in England that appealed — The Competition and Markets Authority let five of them add 2.2% on average, partly because their own borrowing had become dearer. [25][29]
Freeholders who collect ground rent — Leases that double the rent keep doing so until a cap starts, which the UK government expects in late 2028. [30][31]
Employers in Australia who hire migrants as contractors — Hiring someone as a contractor sidesteps minimum wages and pension payments, and by April nobody had been prosecuted under the wage theft law. [37][36]

Who pays

US households carrying a card balance — About $1.38 more a month on an average $6,600 balance for this rise alone, and more on larger balances. [3]
People trying to buy a first home in the US — A 30-year fixed mortgage averaged 7.05% on 17 September, while owners on older, cheaper loans stay put and fewer homes come up for sale. [8][6]
Water customers in England — Bills rose 5.4% on average in April 2026, after the biggest share of a five-year rise landed in April 2025. [24][28]
Leaseholders with doubling ground rents — A rising ground rent can stop a lender offering a mortgage on the flat, so the owner cannot sell. [30][31]
Temporary visa workers in Australia — Two thirds of those surveyed were paid less than the law requires. [37]
Lone parents on the UK National Living Wage — Working full time, they reach only 67% of what the public judges to be a minimum living standard. [20]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

Whether the biggest US banks will raise savings rates this time.

Nothing in today's sources reports a bank moving its savings rate after 16 September. In the last round of rises the national average only reached 0.5%, while flexible high-yield accounts can rise if rates keep going up. [5][13]
02

Whether the US central bank raises again in October.

Futures markets put the chance at about 42% for the 27-28 October meeting and about 53% by December, and the chair, Kevin Warsh, has said he avoids signalling future decisions. [1][12]
03

Where US mortgage rates go next.

They follow long-term bond rates, not the US central bank directly. One analysis says the decision could ease the pressure on them, while the 10-year US government bond yield sits above 5%. [7][6]
04

Whether US grocery prices rose at all in August.

The same NerdWallet page says grocery prices rose 0.1% in August and, further down, that they were unchanged. We could not tell which figure is right. [17]
05

How the Iran war changed the UK income forecasts.

The Joseph Rowntree Foundation's forecast that the poorest third end the decade poorer was built on official projections made before the conflict. [21]
06

When England's 250-pound ground rent cap will start.

The UK government says late 2028 and a committee of MPs wants late 2027. Freeholders have tried to challenge earlier leasehold reforms in court. [31][32]
07

What water customers in England get for the higher bills.

Water UK says companies are investing 20bn pounds this year, while complaints about affordability rose 50% in 2025 and the regulator was investigating repeated supply failures at South East Water. [26][28][27]
08

Whether Australia's wage theft law will ever be used.

Fifteen months in, there had been two criminal investigations and no prosecutions, and a Senate inquiry and a separate review are both still under way. [36]

04 Hope carry this

US egg prices are 23% lower than a year ago. Bird flu outbreaks had sent them soaring in late 2024 and early 2025.

Also true today

Nigeria's tax reforms for 2026 charge no sales tax on basic food, medicines, baby products or sanitary pads.
In the UK, changes to childcare support have cut childcare costs for many working families with younger children.