Published: 10 November 2026
The Bank of England has raised Bank Rate from 3.75% to 4%, its first increase since August 2023. The Monetary Policy Committee (MPC) announced the decision on Thursday 5 November, voting eight to one for a quarter-point rise, with one member preferring a larger half-point increase. The Bank said energy prices linked to the conflict in the Middle East are the main reason, and it signalled that more increases are possible if the conflict is not resolved.
Why the Bank raised rates
Inflation, measured by the Consumer Prices Index, rose to 3.5% in the 12 months to September, up from 3.1% in August, with higher fuel prices a major factor. The Bank expects inflation to climb to around 5% by the middle of 2027, mainly because of energy costs. The Associated Press had noted before the decision that inflation was due to fall to the Bank’s 2% target earlier this year but instead rose, and that a rate rise was expected.
Governor Andrew Bailey said there was enough inflationary pressure in the pipeline to justify the move, but he also said the rise should not be seen as the start of an inevitable long run of increases. Details of the vote, the inflation figures and expert reaction are in MoneyWeek’s live coverage of the decision. The energy pressures behind it are explained in our reports on the Iran war and Britain and the January energy price cap.
What it means for mortgages
Borrowers on tracker or standard variable rate mortgages feel a change in Bank Rate soonest. Data firm Moneyfacts estimated that a quarter-point rise adds about £37 a month to repayments on a £250,000 tracker mortgage over 25 years. People on fixed rates are not affected until their deal ends, and many lenders had already priced in the increase. Moneyfacts figures cited by MoneyWeek put the average new mortgage rate at 5.89%, the highest since November 2023, with typical two-year and five-year fixes close to 6%.
What it means for savers
Higher Bank Rate should eventually mean better rates on some savings accounts, but banks often adjust slowly, and many had already priced in the rise, so any uplift may be modest. MoneyWeek also noted that the tax rate on savings interest is due to rise by four percentage points from April 2027, which makes tax-efficient accounts such as ISAs more relevant for people who exceed their personal savings allowance.
What it means for prices and the public finances
The Bank’s latest report said food price inflation has slowed this year, but it expects food prices to rise in 2027, with the El Niño weather event among the contributing factors. Higher rates also raise the government’s borrowing costs. The Associated Press reported that Chancellor John Healey said the UK would spend £14 billion more on debt interest this year, and that his Budget doubled the surcharge on bank profits to 6% for 15 months from January to help fund support for households. Details of that support are in our energy bills guide.
What happens next
The next inflation figures are due on 18 November, and the MPC’s next decisions are on 17 December and 4 February 2027. Some forecasters expect a further rise to 4.25%: Deutsche Bank expects it in December or February, and Oxford Economics has pointed to February. These are forecasts, not decisions. The ICAEW’s chief economist said the path of rates depends heavily on the US-Iran hostilities and on whether energy prices ease. Our report on the US midterm results looks at why the war’s course matters for Britain, and more money stories are in our Business section.
Quick answers
What is the Bank of England base rate now? 4%, after the 5 November increase.
Will mortgage rates rise again? Many lenders had already priced in the rise, but further increases in Bank Rate could push borrowing costs higher.
When is the next decision? 17 December, then 4 February 2027.
This article is general information, not financial advice. Anyone with a mortgage or savings decision to make should check the latest rates and consider speaking to an independent adviser.
