The Bank of England raised its main interest rate by a quarter of a percentage point to 4% on Nov. 5, its first increase since 2023, to contain inflation risks from global energy prices that have stayed high.
The Monetary Policy Committee approved the move by an 8–1 vote, raising Bank Rate from 3.75%. The only dissenter preferred a larger increase, to 4.25%. The Bank said UK consumer-price inflation was 3.5% in September.
It could reach about 5% by mid-2027. The Bank said inflation would then ease as the energy-price shock fades and restrictive monetary policy takes effect. Higher energy costs are already affecting household fuel and utility bills.
Policymakers said there was still limited evidence that these costs had spread significantly to other prices and wages. They judged that the risk of such effects warranted action. They were particularly concerned because recent economic activity proved stronger than expected.
The committee said future decisions would depend on new evidence, including energy prices, pay and businesses’ pricing. It said decisions would not follow a predetermined path. Governor Andrew Bailey indicated that further increases could be possible if the Middle East conflict and inflation pressures persist.