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# Bank of England raises Bank Rate to 4% in 8–1 vote, with one member backing 4.25%
- URL: https://www.theglobalbanker.com/bank-of-england-raises-bank-rate-to-4-in-8-1-vote-with-one-member-backing-4-25/
- Published: 2026-11-05T23:55:46.000Z
- Updated: 2026-11-06T12:01:23.000Z
- Description: The Bank of England's Monetary Policy Committee voted 8–1 to raise Bank Rate by 0.25 percentage points to 4%, with one member backing a rise to 4.25%.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe, #newsroom, #needs-photo

The Bank of England's Monetary Policy Committee (MPC) voted by a majority of 8–1 to increase Bank Rate by 0.25 percentage points, to 4%, at its meeting ending on 4 November 2026\. One member voted for a rise of 0.5 percentage points, to 4.25%. It is the Bank's first rate rise in more than three years, according to reports.

The committee said the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate. It noted that 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](https://www.theglobalbanker.com/market-united-kingdom/) CPI inflation increased to 3.5% in September and is now expected to rise to around 5% by the middle of next year, the MPC said. Activity data in recent months have generally been stronger than expected, adding to the case for modestly tighter policy.

## ENERGY PRICES AND BORROWING COSTS

According to the minutes, the front-month Brent crude oil futures contract averaged $108 per barrel and the UK front-month natural gas contract 216 pence per therm over the 15 UK working days ending 27 October. Those prices were 38% and 81% higher than at the time of the July Monetary Policy Report.

Benchmark two-year mortgage rates had risen by nearly 50 basis points since the beginning of September, the minutes said. Members also noted that growth in lending to businesses had remained strong, while new mortgage approvals for households had been falling.

## A TURN AFTER SIX HOLDS

The rise ends a run of six consecutive holds dating back to December 2025, according to reports. At its previous meeting, in September, the Bank maintained Bank Rate at 3.75%, with a 6–3 vote already leaning towards tightening. MoneyWeek said the last increase came in August 2023, from 5% to 5.25%, where rates stayed until August 2024.

According to TGB's market profile, the UK banking system is large relative to the economy: the balance sheet of UK-resident banks and building societies was £10.9tn in September 2026, about 3.6 times GDP, and 54% of liabilities were in foreign currency in July 2026.

## HOW THE COMMITTEE SPLIT

Eight members, Andrew Bailey, Sarah Breeden, Swati Dhingra, Megan Greene, Clare Lombardelli, Huw Pill, Dave Ramsden and Alan Taylor, voted for the 0.25-point rise, according to the minutes. Catherine L Mann voted against, preferring to increase Bank Rate by 0.5 percentage points, to 4.25%. Mann, the lone dissenter, pointed to five years of above-target inflation averaging 4.7% and CPI projected to reach 4.9% by mid-2027, according to reports.

Governor Andrew Bailey said: "In view of the news, the case is clear for a 25-basis point rise now." He left the door open to further action if the Middle East conflict continues to drive energy prices higher. Huw Pill said a single hike is unlikely to be sufficient and that more tightening would be needed in the near term, while Alan Taylor described the decision as a risk-management "one-for-now" insurance hike and said the next move could be up, down or sideways. The MPC said monetary policy is not on a pre-set path.

## THE TGB VIEW

The rise reaches UK lenders from different starting points: domestic retail and commercial banking is led by Lloyds Banking Group, NatWest, [Barclays](https://www.theglobalbanker.com/rankings/), HSBC UK, Santander UK and Nationwide, and among the ranked lenders NatWest Group earned a 13.7% return on equity in 2025, against 9.8% at Lloyds Banking Group and 9.2% at Barclays, according to the TGB Bank Rankings. Those three rank 16th, 11th and 5th among the largest banks in Europe by total assets. The minutes record business lending growth that has remained strong and new mortgage approvals that have been falling, and the committee's next scheduled decision is on 17 December.

*Related: [Bank of England consults on tokenisation of collateral in central clearing until 12 February 2027](https://www.theglobalbanker.com/bank-of-england-consults-on-tokenisation-of-collateral-in-central-clearing-until-12-february-2027/)*