The Bank of England’s Monetary Policy Committee voted 8 to 1 at its meeting ending on Wednesday, November 4 to raise Bank Rate by 0.25 percentage points to 4 percent, the first increase since August 2023 after Bank Rate had stood at 3.75 percent since December 2025. Catherine L Mann voted against the proposition, preferring a half point increase to 4.25 percent. Economists polled by Reuters had expected a 7 to 2 vote for the quarter point rise, so the decision itself matched expectations while the vote was more uniformly in favour of tightening than forecast, with no member voting to hold.
The Bank said the conflict in the Middle East is now in its ninth month, global energy prices have continued to rise from an already elevated level, and UK CPI inflation, which rose to 3.5 percent in September, is now expected to rise to around 5 percent by the middle of next year before falling back as the energy effect on twelve month rates fades. Bank staff’s near term projection puts inflation at around 4.5 percent in the first quarter of 2027 and around 5 percent in the second quarter, about 1.25 percentage points higher than projected in the July Report. The Committee said there remains limited evidence of knock-on effects on other prices and wages, but the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase, and activity data in recent months have generally been stronger than expected.
Monetary policy is not on a pre-set path, the Bank said, and the Committee will assess the evidence at each meeting, in particular how likely high energy prices are to feed through to other prices, monitoring underlying pay, pricing behaviour and slack. Governor Andrew Bailey said that without news which softens the risks to inflationary pressures, he can see the argument for a further increase in rates; Alan Taylor described the move as a risk management insurance hike and said the next move could be up, down, or sideways. The minutes of the meeting ending December 16 will be published on December 17, 2026.