Bank of England Raises Bank Rate to 4%: What It Means

The Bank of England raised Bank Rate by 0.25 percentage points to 4% on 5 November, its first increase since August 2023, as energy prices linked to the Middle East conflict push inflation higher.

The Monetary Policy Committee voted 8-1, with one member preferring a larger 0.5-point rise.

Why the Bank acted

UK consumer price inflation rose to 3.5% in the 12 months to September, up from 3.1% in August. The committee expects inflation to reach about 5% by mid-2027. Governor Andrew Bailey said there is enough inflationary pressure in the pipeline, but that the move should not be seen as the first in an inevitable long sequence of rises.

What it means for borrowers

Most people on fixed-rate mortgages will see no immediate change, as lenders had largely priced in the rise. Those on tracker or standard variable rate deals will feel it sooner. Moneyfacts estimates a 0.25-point rise adds around £37 a month to a £250,000 tracker mortgage over 25 years.

What it means for savers

Savings rates should edge up, though banks may be slow to pass on the full increase. Some forecasters, including Deutsche Bank and Oxford Economics, expect a further rise to 4.25%.

Next decisions

The next Bank Rate announcements are on 17 December 2026 and 4 February 2027. Markets will watch energy prices and incoming inflation data for clues.

Sources: Bank of England Monetary Policy Committee announcement (5 November 2026); MoneyWeek live coverage; Moneyfacts estimates as reported.