Bank of England raises interest rates to 4% over energy prices
On 5 November 2026 the Bank of England raised Bank Rate by 0.25 percentage points to 4%. It says high energy prices are the reason and that it wants to stop them feeding into the wider economy.
Author: Editorial teamPublished: 2 min read
Contents
The Bank of England has raised its main interest rate, Bank Rate, by 0.25 percentage points to 4%. The bank published the decision on 5 November 2026. The Monetary Policy Committee (MPC) met until 4 November.
How the vote went
The decision was made by a majority of 8 to 1. One member of the committee wanted a bigger rise of 0.5 percentage points, to 4.25%. The next interest rate meeting is scheduled for 17 December 2026.
Why the bank raised rates
The bank points to the conflict in the Middle East, which has disrupted the transport and supply of energy. That has pushed up its price, and with it households' fuel costs and utility bills. According to the bank, energy prices remain high and very volatile.
The bank admits that so far there is little sign of significant knock-on effects on other prices and wages. However, it believes energy has been expensive for long enough that such effects will eventually appear. Another argument was data showing the economy is stronger than expected. In the bank's view, this increases the risk that expensive fuel and energy will push up prices across the economy. It therefore concluded that it had to act now.
Inflation
Inflation currently stands at 3.5% (September 2026 data), against the bank's target of 2%. The bank expects inflation to rise to around 5% by mid-2027.
Background
The bank began cutting rates in August 2024, from 5.25%. In December 2025 the rate fell to 3.75%. The latest rise is therefore a move in the opposite direction. The bank stresses that monetary policy is not on a pre-set path. The committee will take future decisions depending on incoming data, particularly on pay, pricing behaviour and slack in the economy.
What this means for you
Bank Rate affects the cost of borrowing and the interest paid on savings in the UK. This concerns people who are paying a mortgage, looking for one, or saving for a holiday or a home. The BBC's cost of living correspondent Kevin Peachey framed the topic this way in a video report. Actual changes in rates, however, depend on the decisions of individual banks and lenders. It is worth checking the terms of your own agreement, especially if a fixed-rate period is coming to an end.
Sources
This article was prepared automatically by AI from the listed sources and published without prior editorial review. Spotted a mistake? Use the “Report an error in this article” button.
Photos
- Cover: „leadenhall market, historic, architecture, english, london”, author: michaeldbeckwith, licence Pixabay Content License; cropped or resized.
- Photo 1: „keys, hands, house, lock, home”, author: Sephelonor, licence Pixabay Content License; cropped or resized.
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