FX.co ★ BoE Raises Rates for 1st Time Since 2023

The Bank of England voted by a majority of 8–1 to raise the key Bank Rate by 25 basis points to 4% in November 2026, in line with expectations. This marks the first increase in borrowing costs since August 2023. One policymaker, Catherine Mann, dissented in favour of a larger 0.5 percentage point rise to 4.25%.

UK inflation is now forecast to climb to about 5% by the middle of next year, up from the current rate of 3.5%. Thereafter, it is projected to decline as the impact of higher energy prices fades and the still restrictive stance of monetary policy continues to weigh on price pressures. In addition, recent activity data have generally surprised on the upside, reinforcing the case for slightly tighter policy.

Policymakers stressed that monetary policy is not on a pre-set course. The Committee will continue to evaluate incoming data at each meeting and will adjust the Bank Rate as needed to ensure that CPI inflation returns to the 2% target over the medium term.