Bank of England Raises Bank Rate to 4% in an 8-1 Vote, Its First Increase Since August 2023, as Inflation Reaches 3.5% and the Bank Projects About 5% by Mid-2027

The Bank of England raised Bank Rate on Thursday, November 5, 2026, lifting it by 0.25 percentage points from 3.75% to 4%. The decision, by the Monetary Policy Committee (MPC), ends a pause that included holds on July 30 and September 17. This article draws on the Bank's own Bank Rate page, a summary published by the Mortgage Talk Association on November 6 and MoneyWeek's live coverage of the decision. The Bank's page does not report the vote breakdown, so the voting details come from the two secondary sources, which agree with each other. The Bank's full minutes and Monetary Policy Report were not reviewed for this article.

The decision

The committee voted 8-1 for a quarter-point rise. One member, Catherine Mann, voted for a larger half-point rise, to 4.25%. The summary notes that two members, Swati Dhingra and Alan Taylor, had previously favoured holding rates and backed the increase this time. The Mortgage Talk Association describes this as the first increase in Bank Rate since August 2023, a claim the Bank's own page, as reviewed, does not state directly. The Bank's next decision is due on December 17, 2026.

Inflation and the outlook

Consumer price inflation was 3.5% in the 12 months to September 2026, up from 3.1% in August. The Bank expects inflation to reach about 5% by mid-2027, then ease as the direct effects of higher energy prices fade. The reports describe the outlook as highly uncertain, depending on how long the Middle East conflict lasts and how far energy costs pass through to other prices and wages. The 5% figure is the committee's projection, not an outcome, and projections of this kind are revised as new data arrive.

Why the committee acted

The MTA summary lists several reasons. The inflation outlook has worsened since the July forecast because global energy prices are higher. UK economic activity has been more resilient than expected, and the labour market appears to be stabilising. Some measures of underlying inflation have stopped falling. The Bank is concerned that the slack currently in the economy may not be enough to prevent the energy shock from causing more persistent inflation.

It also notes that second-round effects, meaning knock-on increases in wages and prices, have been limited so far, though the Bank warns they can take time to appear. Firms have absorbed some costs through lower margins, and fixed-price contracts and hedging have delayed the impact, but the Bank says these buffers may be temporary. The summary describes the move as a "modest increase as insurance against the risk of more persistent inflation," reflecting broad support for a small step.

What the Governor said

Governor Andrew Bailey said: "Today's increase shouldn't be seen as the first in an inevitable long sequence of hikes." MoneyWeek also quotes Sanjay Raja of Deutsche Bank, who said: "we don't think this is the start of a long hiking cycle." The summary adds that Bailey said the rise should not be read as the start of a fixed series of increases and that future decisions will depend on energy prices, wages, business pricing and economic activity. Those are statements of intention, not commitments.

Mortgage borrowers

MoneyWeek reports, citing Moneyfacts, that a tracker mortgage of 250,000 pounds over 25 years would rise by about 37 pounds a month. Borrowers on standard variable rates will probably see repayments rise too, though more gradually than trackers. Fixed-rate borrowers see no immediate change, because their rate changes only when the deal ends. Some lenders had already priced the rise into fixed rates before the announcement, which means that new fixed-rate deals may not move much on the day.

The pattern of decisions

The Bank Rate page shows three decisions in 2026 within its table: a hold at 3.75% on July 30, a hold at 3.75% on September 17, and the rise to 4% on November 5. The page says it is not a complete list of 2026 decisions. One secondary source, Karmactive, reported that the September vote was 6-3 to hold with three members wanting a rise to 4%. This article has not verified that against the Bank's minutes, so treat it as unconfirmed. If correct, the move from a 6-3 hold to an 8-1 rise in two months shows how quickly the committee's balance shifted.

Other central banks

The MTA summary notes that the European Central Bank and the US Federal Reserve both held rates steady at their late-October meetings. The Bank of England therefore moved against the pattern of the other two large central banks mentioned.

What the sources do not say

The sources reviewed do not give the Bank's growth forecast or its projection for Bank Rate. They do not say how the rise will affect savings rates, insurers' investment returns, annuity pricing or pension scheme valuations, and this article does not speculate. Households with variable-rate borrowing should check with their lenders for the exact change to their payments.