Bank of England interest rate increased for the first time in over three years
On 4 November 2026, the Monetary Policy Committee voted to increase the Bank Rate to 4% (an increase of 0.25%).
6 Nov 2026
On 4 November 2026, the Monetary Policy Committee voted to increase the Bank Rate to 4% (an increase of 0.25%).
The increase is an effort to control inflation which increased to 3.5% in September and is expected to rise to around 5% by the middle of next year.
Andrew Bailey, Governor at the Bank of England, said that the increase ' shouldn't be seen as the first in an inevitable long sequence of hikes' but cautioned that 'unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase'.
Business and other interest groups have responded to the interest rate increase.
Tina McKenzie, National Chair of the Federation of Small Businesses (FSB), said:
'Today's rate rise is a sobering reminder that the fallout from global turmoil is landing squarely on the shoulders of Britain's small businesses.'
Alpesh Paleja, Confederation of British Industry (CBI) Deputy Chief Economist said:
'...households and businesses face higher borrowing costs in the near term. That is a bitter pill to swallow, but one the MPC will see as necessary to prevent a more prolonged inflation shock and lasting damage to living standards.'
Simon Pittaway, Principal Economist at the Resolution Foundation, commented that the increase in the inflation forecast may have more of an impact than the interest rate itself:
'The big increase in the outlook for inflation – now forecast to peak at almost 5 per cent next spring – is a major worry for households. High inflation will shrink real-terms pay packets – which are set to be £670 lower next year compared to previous forecasts.'
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