Bank of England raises rate to 4%, sees inflation near 5%

What happened

The Bank of England's Monetary Policy Committee voted 8–1 to raise Bank Rate by 0.25 percentage points to 4% at its meeting ending Nov. 4, with the decision published Nov. 5. It is the first Bank Rate increase since August 2023. One member, Catherine L. Mann, voted for a larger 0.5-point rise to 4.25%.

Primary document: The Monetary Policy Summary said the Middle East conflict is in its ninth month and that "global energy prices have continued to rise from an already elevated level." Policymakers said direct energy effects are clear, evidence of broad second-round wage and price effects is still limited, but "the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate." Activity data have been stronger than expected, adding to the case for modestly tighter policy.

CNBC reported that markets had priced more than a 99% chance of a hike before the announcement, with roughly a one-in-four chance of another move in December, citing LSEG data. AP noted the same 8–1 vote and the mid-2027 inflation warning tied to the war-driven energy shock.

Why it matters

The hike makes the BoE the latest major central bank to tighten after the Iran war pushed global energy prices higher. UK CPI inflation was 3.5% in September, and the MPC said it now expects inflation to rise to "about 5%" by the middle of 2027 before falling back as energy base effects fade and restrictive policy bites.

What’s next

The next MPC decision and minutes are due Dec. 17, 2026. Watch whether energy futures ease and whether UK wage and services inflation start to show the second-round effects the Bank is guarding against.