Bank of England raises rates to 4% and signals more hikes may follow
The Bank of England raised its key rate a quarter point on an 8–1 vote, citing energy-driven inflation from the Middle East conflict. One policymaker wanted a half-point increase.
As of 7:09 p.m. ET, Monday, Nov. 9, 2026
The Bank of England raised its benchmark Bank Rate by a quarter percentage point to 4% from 3.75% on Thursday, according to the bank's Monetary Policy Summary. It was the bank's first increase since August 2023, Reuters reported.
The Monetary Policy Committee voted 8–1. The vote was not unanimous: Catherine L. Mann was the only member to vote against, and she wanted a bigger half-point increase to 4.25%, according to the bank's minutes. The other eight members, including Governor Andrew Bailey, backed the quarter-point move.
Energy shock drives the move
The bank said the conflict in the Middle East "is now in its ninth month" and that global energy prices "have continued to rise from an already elevated level." UK consumer price inflation rose to 3.5% in September and is now expected to rise to around 5% by the middle of next year, the bank said.
The Associated Press reported that fuel costs have risen sharply because of the Iran war and bottlenecks in the Strait of Hormuz, which have squeezed global oil and gas supplies.
The bank said there was still "limited evidence" that energy costs were pushing up other prices and wages. However, it said "the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate."
More hikes possible, not certain
The bank said monetary policy "is not on a pre-set path" and that the committee "will continue to assess the evidence at each meeting."
"Today's increase should not be seen as the first in an inevitable long sequence of hikes," Bailey said at a press conference, according to Reuters. "But unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase."
Reuters reported that Bailey called the big fall in oil prices over the previous 48 hours "encouraging news." He also said earlier drops in oil prices had turned out to be false dawns.
Policymakers were split on what comes next, according to the minutes. Deputy Governor Clare Lombardelli and Chief Economist Huw Pill said a further increase was likely to be needed in the near term. Megan Greene said "additional hikes will likely be required going forward." Alan Taylor called Thursday's move a "one-for-now" insurance hike and said "the next move could be up, down, or sideways."
The committee's next decision is due Dec. 17, according to the bank.
Sources
- Bank of England, "Bank rate increased to 4% - November 2026 Monetary Policy Summary and Minutes"
- Reuters (David Milliken, Andy Bruce and Suban Abdulla), "Bank of England raises rates for first time since 2023, warns more likely," via StreetInsider
- The Associated Press, "The Bank of England hikes interest rate to 4% with inflation fanned by war in Iran"
- Euronews (readable AP copy, "with AP"), "Bank of England raises key interest rate for first time in over 3 years" (Nov. 5, 2026)
