- Decision
- Raise
- Rate change
- 25 bps
- bank rate
- 4%
The Bank of England’s Monetary Policy Committee (MPC) raised Bank Rate by 25 basis points to 4% in November 2026, citing mounting inflationary pressures from higher energy prices and stronger-than-expected activity. The eight-to-one vote saw the dissenter favour a larger increase, following a 25-basis-point cut to 3.75% in December 2025 and subsequent holds through September 2026. Consumer price index (CPI) inflation rose to 3.5% in September and was projected to reach around 5% in 2027 Q2 before declining as energy-price effects fade and restrictive monetary policy restrains inflation. Evidence of knock-on effects on other prices and wages remained limited, but the MPC judged that risks of material second-round effects had increased, while many underlying inflation measures had stopped falling above target-consistent rates. Economic growth was expected to moderate over coming quarters despite recent resilience, while business lending growth remained strong. Further increases in global energy prices amid the prolonged Middle East conflict remained the main source of uncertainty for the inflation outlook. The MPC stressed that policy was not on a pre-set path and would monitor pay, pricing behaviour and economic slack, adjusting Bank Rate as necessary to return inflation to the 2% target sustainably in the medium term.
Rate evolution
From June to December 2025, the Bank of England cut Bank Rate by 50 basis points from 4.25% to 3.75%, with reductions in August and December and an autumn pause, citing substantial disinflation, weak growth, a loosening labour market and moderating pay. By late 2025 and early 2026, the Monetary Policy Committee judged persistence risks less pronounced and weaker demand more apparent as Consumer Prices Index (CPI) inflation peaked and pay and services inflation eased further, while retaining a gradual, non-pre-set easing bias.
The Committee held Bank Rate at 3.75% by votes of 8-1 in April 2026, 7-2 in June and 6-3 on 29 July, as the Middle East conflict raised energy prices and second-round risks despite continued underlying disinflation and a fall in CPI inflation to 2.6%. At its meeting ending on 16 September, it maintained Bank Rate at 3.75% by another 6-3 vote, with three members preferring an increase to 4%, as further energy price increases and a rise in CPI inflation to 3.1% in August tilted inflation risks further upward, although evidence of material second-round effects remained limited.
At its meeting ending on 4 November 2026, the Committee raised Bank Rate by 0.25 percentage points to 4% by an 8-1 vote, with one member preferring a 0.5 percentage point increase to 4.25%, as energy prices continued to rise, CPI inflation increased to 3.5% in September and inflation was projected to reach around 5% in mid-2027. It judged that the scale and duration of the energy price increases warranted tightening despite limited evidence of second-round effects, with stronger-than-expected activity adding to the case, and stressed that policy was not on a pre-set path as it continued to monitor pay, pricing behaviour and slack.