Bank of England raises Bank Rate to 4%: what it means for loans and repayments

The Bank of England's Monetary Policy Committee (MPC) raised Bank Rate by 0.25 percentage points to 4% on 5 November 2026. It was previously 3.75%. The committee's latest meeting ended on 4 November 2026.

Why rates have gone up

The Bank says the conflict in the Middle East has disrupted the transport and supply of energy. That has pushed up fuel prices and utility bills. According to the Bank, the increase is meant to limit how far higher energy costs feed into other prices in the economy. Inflation is currently 3.5%, against a target of 2%.

Eight members voted for a rise of 0.25 percentage points. One member, Catherine Mann, voted for a rise of 0.5 percentage points. Rates were held at 3.75% at meetings from February to September. The next decision is due on 17 December 2026.

The effect on borrowing

Bank Rate affects the interest rates on many financial products. In its minutes, the Bank notes that market expectations for rates were already feeding through to borrowing costs. Benchmark two-year mortgage rates have risen by nearly 50 basis points, or almost 0.5 percentage points, since the beginning of September 2026.

BBC News reports that mortgages, credit cards and loans could become more expensive for millions of people. One person quoted by the broadcaster says her repayments are going up by £200. We could not access the full BBC article, so we do not give further details from it.

The rise also affects money owed to the tax authority. HMRC interest rates are linked to Bank Rate. Interest on late payments is Bank Rate plus 4 percentage points, while interest on overpayments is Bank Rate minus 1 percentage point (with a floor of 0.5%). HMRC says both rates will go up following the change.

What this means for you

People on a variable-rate mortgage, or a loan linked to Bank Rate, may pay more each month. The same applies to those whose current fixed rate is about to end, as new deals are already more expensive than at the start of September. Anyone repaying credit cards or loans should check with their provider whether the interest rate will change. A higher Bank Rate also means higher interest on late tax payments to HMRC. The exact impact depends on your contract, so it is worth checking its terms or asking your bank.