The Bank of England has raised interest rates for the first time in more than three years, increasing the base rate from 3.75% to 4% in a move aimed at tackling renewed inflationary pressures.
The decision, announced on Thursday 5th November 2026, followed growing concerns over rising energy prices, fuelled by the continuing conflict in the Middle East. and of the Russia-Ukraine war.
UK inflation reached 3.5% in September 2026, and the Bank now expects it could approach 5% by the middle of 2027.
Vote
The Monetary Policy Committee voted 8–1 in favour of a quarter-point increase, although one member wanted a larger rise to 4.25%.
Higher interest rates will increase borrowing costs for mortgage holders and businesses, while potentially offering better returns for savers.
The Bank has warned that further increases remain possible if energy prices continue to drive inflation higher.
The decision highlights the difficult balancing act facing policymakers: controlling inflation without damaging an already fragile economy.