The bank announced the rise from 3.75% on 5 November. Eight committee members backed it, while Catherine Mann preferred a larger increase. UK Finance estimates that 510,000 tracker mortgage holders face a typical £31 monthly increase; existing fixed-rate payments stay unchanged until their deals end.
The Bank of England raised its benchmark interest rate by 0.25 percentage points, its first increase since August 2023. After cutting rates, the bank had held them at the previous level since December 2025.
At a meeting ending on 4 November 2026, the bank’s Monetary Policy Committee voted 8–1 to raise the rate to 4%. Mann, the dissenting member, favored a rise of 0.5 percentage points to 4.25%, rather than keeping the rate unchanged.
Tracker mortgages follow the bank’s rate, so their monthly repayments rise when it does. UK Finance, a banking trade body, estimates that 510,000 tracker mortgage holders face a typical monthly increase of £31; the amount for an individual borrower depends on the outstanding loan. The BBC published the trade body’s estimate.
Borrowers on standard variable-rate mortgages must wait to see whether their lenders pass on the increase. Future fixed-rate deals can also be affected, even though payments on current deals do not change before they end.
The bank said the rise was intended to limit the broader inflationary effects of higher energy prices linked to the Iran war, not to control global energy prices. Higher rates are intended to make borrowing more expensive and reduce spending, easing demand for goods and services.
The bank said evidence that higher energy costs were feeding into other prices and wages remained limited, but it judged the inflationary pressure ahead sufficient to warrant the increase.
Annual consumer-price inflation reached 3.5% in September 2026, above the bank’s 2% target. In its central forecast, the bank expects inflation to peak at 4.9% in mid-2027, up from its July forecast of 3.2%, and return to target only in 2028. Its policy summary rounds the projected peak to around 5%.
In a separate adverse scenario, the bank projects inflation peaking at 6.2% and remaining above target throughout the forecast period.
Governor Andrew Bailey said another increase could be warranted without news easing inflation risks, though a long sequence of rises was not inevitable. He said subsequent decisions would depend on evidence about energy prices and inflation, with progress toward resolving the Middle East conflict a key factor.
The bank’s next interest-rate decision is scheduled for 17 December 2026.
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