Bank Rate climbs to 4 percent after MPC vote

The Bank of England delivered its first rate rise in more than three years. Bank Rate climbs to 4 percent after an 8-1 Monetary Policy Committee vote published with the November 2026 minutes on November 5.

What happened

The Bank's monetary policy summary said the MPC voted to raise Bank Rate by 0.25 percentage points to 4%, with Catherine L Mann preferring a 0.5 point move to 4.25%. September CPI was 3.5%, and staff projections see CPI near 4.5% in 2027 Q1 and about 5% in 2027 Q2. The next scheduled decision is 17 December 2026, and the Asset Purchase Facility stock was £362 billion as of 4 November.

The BBC said the hike took Bank Rate from 3.75% to 4%, the first increase in more than three years. Governor Andrew Bailey said a long sequence of hikes was not "inevitable" but that the move was "unlikely to be the last" unless Middle East conflict risks resolved. The Bank's inflation peak forecast was put near 4.9% in mid-2027, with an adverse scenario at 6.2%. UK Finance estimated about 510,000 tracker mortgages would rise by roughly £31 a month.

Why it matters

A first hike in years reframes sterling rates just as U.S. election volatility is still feeding global risk assets. Our preview on Bank of England November hike odds had already priced a high probability of this outcome; Bank Rate climbs to 4 percent confirms that call in the official minutes.

Household cash-flow effects land quickly through tracker mortgages, while markets will parse Bailey's "unlikely to be the last" line against the staff path that sees CPI still rising into 2027. That mix keeps December live even after the November decision is done.

Cross-asset desks will also map the BoE print against the prior Bank Rate rise Thursday framing that anticipated the four-percent level into the announcement window.

Mann's lone dissent for 50 basis points matters for the reaction function: it signals at least one member still sees upside inflation risk large enough to front-load tightening rather than drip 25 basis-point steps.

Market participants will also weigh sterling money-market pricing into mid-December, because a second hike would reprice front-end GBP rates even if Bailey continues to reject an "inevitable" sequence. Mortgage-broker commentary after the minutes focused on the 510,000 tracker cohort and on whether fixed-rate refi demand rises before the December meeting. Outside the UK, dollar-sterling crosses will test whether the BoE's move is read as idiosyncratic inflation insurance or as part of a broader G10 tightening impulse alongside still-elevated Fed December odds. Staff CPI paths near 4.5% to 5% in 2027 keep the door open for further steps even if Middle East risk premia fade.

Sterling credit desks will also watch whether UK bank deposit betas rise after the hike, because a faster pass-through into savings rates can tighten financial conditions beyond the headline 25 basis points. Gilts already priced a high probability of this meeting's move; the open question is December skew once Mann's dissent is digested. International allocators comparing BoE and Fed paths will keep the 17 December date next to U.S. CPI on the same watchlist through the rest of November. Broker notes after the minutes also asked whether small lenders would reprice variable SME facilities faster than the mortgage book into the December meeting window. That channel can tighten credit without waiting for another official MPC decision.

What's next

Watch the 17 December decision and whether Bailey's guidance softens if Middle East risk premia fade. The Bank of England's November 2026 monetary policy summary is the primary source for the vote and projections.

A second consecutive hike in December would confirm Bank Rate climbs to 4 percent was the start of a short tightening sequence rather than a one-and-done adjustment.

Tracker mortgage repricing over the next payment cycle will be the first real-economy read on how far the 25 basis-point step feeds into household budgets.