Bank of England raises rates to 4% as inflation is expected to reach about 5% by mid-2027

The Bank of England's Monetary Policy Committee (MPC) decided on 5 November 2026 to raise Bank Rate by 0.25 percentage points to 4%. According to the House of Commons Library, this is the first rate rise since August 2023. In September and July 2026 the rate stood at 3.75%.

Why the Bank raised rates

The Bank points to the conflict in the Middle East, which has disrupted the transport and supply of energy. This has pushed up its price and, as a result, households' fuel costs and utility bills.

Inflation is currently 3.5%, and the Bank expects it to rise to about 5% by mid-2027. The inflation target is 2%. Higher bills could lead businesses to raise prices to cover their own costs.

The Bank notes that there is so far little evidence of significant knock-on effects on prices and wages. It believes, however, that energy prices have stayed high 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 says, it must act now.

Will there be more rises

The Bank stresses that the current decision should not be read as the start of an inevitable series of increases. It adds, however, that unless the conflict in the Middle East is resolved, this does not look like the last one either. The MPC is to assess the outlook at each meeting. The next decision is scheduled for 17 December 2026.

According to the description of the BBC's report, economics editor Faisal Islam considers one more rise likely but thinks it will be the last. This is a commentator's assessment, not the Bank of England's position.

What this means for you

The Bank of England's rate affects interest on loans and savings. People with a variable-rate mortgage, or whose fixed rate is about to end, may therefore see higher payments. However, the sources we used give no specific calculations for borrowers, and banks set the rates on their own products. It is worth checking the details with your own lender.