British Central Bank Hike
November 5, 2026
By a vote of 8-1, the Monetary Policy Committee of the Bank of England authorized a 25-basis point increase of the policy Bank Rate to 4.0%, marking the first hike August 2023. The rate had thereafter remained at 5.75% until an easing cycle that began in August 2024 and culminated at 3.75% after a 25-basis point cut last December. In commencing a rate hike cycle today, bank officials dealt with that fact that already elevated energy prices had by late October risen considerably further than when their previous quarterly Monetary Policy Report had been published. Noting an 11-month high 3.5% British consumer price inflation rate by September, they revised upward their forecast to 4.5% next quarter and 5% by the middle of 2027. While evidence of knock-on effects from higher energy prices to other prices or wages remains minimal, the committee felt that “the duration and scale of the energy price increase had generated sufficient inflationary pressures in the pipeline to warrant an increase in Bank Rate.” The sole dissenter in the decision, Catherine Mann, wanted today’s move to be an increase of 50 basis points, arguing that
From a risk management and credibility perspective, an activist approach was needed to prevent persistent inflationary dynamics becoming embedded as the economy reached thresholds that threatened to cause non-linear responses in price and wage-setting.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank of England
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