Bank of England Raises Bank Rate to 4%

The Bank of England’s Monetary Policy Committee increased Bank Rate to 4% at its meeting concluding on 4 November 2026, according to the Bank’s policy summary. The quarter-percentage-point increase received eight votes. The minutes record Catherine L Mann’s vote for a half-percentage-point increase, which would have put the rate at 4.25%.

Bank Rate applies to deposits that commercial banks, building societies and other eligible financial institutions hold with the central bank, according to the Bank’s definition. It also applies to some borrowing by those institutions from the Bank. In its explanation of how the rate works, the Bank says increases usually pass through to the rates commercial banks charge borrowers and pay savers, but not automatically to every product.

The committee’s assessment linked higher global energy prices directly to increases in energy bills for households and businesses. It said evidence remained limited that these costs were spreading into wages and prices elsewhere in the economy. Nevertheless, the MPC said inflation pressures still to come justified an increase in Bank Rate. It also said recent figures on economic activity had generally exceeded its expectations.

In its November forecast, the MPC projected CPI inflation of about 5% by the middle of 2027, compared with the September 2026 reading of 3.5%. Its projection then showed inflation declining as the effects of energy prices diminish and restrictive monetary policy reduces inflationary pressure.

The November decision followed a hold in September. At the meeting that concluded on 16 September 2026, six committee members voted to leave Bank Rate at 3.75%, while three voted for a quarter-percentage-point rise to 4%. The Bank published the November policy summary and meeting minutes on 5 November 2026.

For subsequent decisions, the MPC said there was no fixed course for Bank Rate. Its stated approach is to assess evidence at every meeting, including wage developments, how businesses set prices and the amount of spare capacity in the economy. The committee said it would change the rate as necessary to bring CPI inflation back to its 2% target over the medium term.

* This article is based on publicly available information at the time of writing.