Bank of England Raises Rates to 4%, First Hike Since 2023
The Bank of England raised its key rate a quarter point to 4% on Nov. 5, 2026, its first increase since August 2023, citing inflation pressure.
The Bank of England raised its main interest rate by a quarter of a percentage point to 4% on Thursday, November 5, 2026, its first increase since August 2023. The decision, reported by both the Associated Press and Reuters, lifts Bank Rate from 3.75%.
The decision at a glance
Item | Detail |
|---|---|
New Bank Rate | 4.00% |
Previous rate | 3.75% |
Change | +0.25 percentage point |
Vote | 8–1 |
Dissent | Catherine Mann voted for a half-point rise to 4.25% |
Last increase before this | August 2023 |
Sources: AP via Euronews; Reuters via Business Day.
Eight members of the Monetary Policy Committee backed the quarter-point move, while one wanted to go further, both outlets reported. According to AP, the bank said "the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate."
Why the bank changed course
The Bank of England had been lowering rates from a 15-year high of 5.25%, AP noted, until the U.S. and Israel attacked Iran on February 28. Its new forecasts see U.K. inflation at around 5% by mid-2027, AP reported, and Governor Andrew Bailey said further increases were possible but "not inevitable."
Why U.S. investors should care
The U.K. decision fits a wider shift among central banks from cutting rates to raising them. The U.S. Federal Reserve raised rates in September, and markets are pricing in another hike next month, Reuters reported on Thursday. At least three Fed officials, including Richmond Fed President Thomas Barkin, were scheduled to speak the same day, ahead of Friday's October jobs report.
For ordinary investors, higher rates cut both ways:
- Savers can earn more on cash, CDs and money market funds when central banks raise rates.
- Borrowers face higher costs on mortgages, credit cards and other loans.
- Stocks and bonds can come under pressure because future profits and existing bond payments are worth less when new safe investments pay more.
If you hold international funds, U.K. stocks and bonds are often a slice of them; our guide to what an ETF is explains how those funds are built. For how rate news fed into U.S. trading today, see our stock market today story for November 5.
This article is for information only and is not investment advice.