Bank of England raises interest rate to 4% over energy prices
On 5 November 2026 the Bank of England raised Bank Rate by 0.25 percentage points to 4%, aiming to limit the effect of rising energy costs on prices across the economy.
Author: Editorial teamPublished: 2 min read
The Bank of England announced on 5 November 2026 that it was raising Bank Rate by 0.25 percentage points to 4%. The decision was taken by the Monetary Policy Committee (MPC) at its meeting on 4 November.
Why the rise
According to the central bank, the conflict in the Middle East has disrupted the transport and supply of energy. That has pushed up its price, and with it household fuel costs and utility bills. Energy prices have been very volatile: they fell when fighting eased and rose again when the conflict resumed.
Inflation is currently 3.5% (the Bank's target is 2%). The Bank expects it to rise to about 5% by mid-2027 as higher energy prices gradually feed through to other prices. Businesses, for example, may raise prices to cover higher bills.
The Bank says there is so far little evidence of significant knock-on effects on prices and wages. However, it believes energy has been expensive for long enough that such effects will eventually appear. The economy has also proved more resilient and activity stronger than expected, which adds to that risk. For that reason, the Bank explains, it must act now.
What next
The Bank of England stresses that the rise should not be seen as the first of a long series of increases. At the same time, it says that unless the conflict in the Middle East is resolved, this does not seem likely to be the last. The MPC will assess the outlook at each meeting. The next decision is scheduled for 17 December 2026.
Previously the Bank had been cutting rates: from August 2024 it reduced them from 5.25% to 3.75% in December 2025.
What this means for you
Bank Rate is a reference point for the interest charged on loans and paid on savings, so the change may affect people with a mortgage or other loans, as well as those who keep savings in UK banks. The scale and pace of any changes depend on the offer from each bank or lender. It is worth checking the terms of your agreement, especially if a fixed-rate period is ending, and comparing savings account offers. BBC's summary mentions the effect of the rise on jobs, loans and savings, but the details of that article could not be retrieved.
Sources
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