Bank of England lifts benchmark to 4% on energy inflation threat

Decision and dissent

The Monetary Policy Committee pushed its key policy rate up by a quarter point to 4% on 4 November 2026. Eight officials backed the move; one pressed for a larger half-point increase to 4.25%. The majority cited pipeline inflationary pressure from sustained high energy costs, with consumer price inflation forecast to climb toward 5% by mid-2027 before easing as base effects fade.

What to watch next

The panel stressed that no automatic course is set and pledged to review data at each gathering. Close attention will fall on whether elevated energy costs spill into broader wages and prices, alongside measures of labour market slack and corporate pricing. Several members signalled that additional tightening may follow if pressures persist. The subsequent decision is due on 17 December 2026.

Sources

1. Bank of England — Bank rate increased to 4% - November 2026 Monetary Policy Summary and Minutes ↗

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