Bank of England raises interest rates to 4%, first increase since August 2023

On 5 November 2026, the Bank of England raised Bank Rate by 0.25 percentage points, from 3.75% to 4%. It is the first increase since August 2023.

Why the Bank raised rates

According to the Bank of England, energy prices remain high and volatile because of the conflict in the Middle East. The conflict has disrupted the transport and supply of energy, pushing up household fuel costs and utility bills.

Inflation has risen to 3.5%, against the Bank's 2% target. The Bank expects it to reach about 5% by mid-2027 as higher energy prices feed through to other prices. So far, the Bank says, there is little sign of significant knock-on effects on other prices and wages. However, the economy has been more resilient and activity stronger than expected, which adds to the risk of energy prices feeding into other prices. The Bank therefore decided it must act now.

According to a House of Commons Library briefing, eight members of the MPC voted for a 0.25 percentage point rise and one voted for 0.5 percentage points.

Will there be more rises?

Bank of England Governor Andrew Bailey said the decision should not be seen as the start of an inevitably long series of increases. However, he added that unless the conflict in the Middle East is resolved, another rise seems likely. The committee will assess the outlook at each meeting. The next decision is due on 17 December 2026.

According to Polish Express, the decision was announced a week after the autumn Budget. Before the US launched its operation in February, the committee had assumed rates would be cut this year.

What this means for you

The Bank of England's rate affects interest on loans and savings, but the sources do not say how quickly or by how much rates at individual banks will change. People with a variable-rate mortgage, or those planning to remortgage, should check the terms with their lender. Savers can compare offers from banks.