Bank Rate from 5 November 2026

4.00%

The first rise in Bank Rate since August 2023.Up from 3.75 percent. Eight of the nine members of the Monetary Policy Committee voted for it. The ninth wanted 4.25 percent.

In one minute

The Bank has changed direction, with its first rise after six cuts and eleven months on hold.
Energy is the cause. The Middle East conflict has pushed inflation to 3.5 percent, and the Bank expects 4.9 percent by mid 2027.
Plan on one more rise, not a cut. The Bank’s own survey of the markets expects 4.25 percent by February.

Three years of Bank Rate What it costs you Why it went up The economy Which one is you What happens next Five things to do

Three years of Bank Rate

Six cuts in sixteen months, eleven months on hold, and now the first rise.

Bank Rate at each change, percent

5.25

5.00

4.75

4.50

4.25

4.00

3.75

4.00

Aug
2023Aug
2024Nov
2024Feb
2025May
2025Aug
2025Dec
2025Nov
2026

Every change since the peak. Source, Bank of England.

How the nine members voted

8 voted for 4%

1 voted for 4.25%

None voted to hold.

Not one of the nine voted to hold. When the only dissent is for a bigger rise, the committee is showing you which way it leans.

The point. Cheaper money is off the table for now. Any plan built on rates falling next year needs redoing.

What it costs you

Extra interest a year from the quarter point rise, on borrowing that tracks Bank Rate.

Extra interest a year at 4 percent instead of 3.75

£100,000 borrowed£250 a year

£250,000 borrowed£625 a year

£500,000 borrowed£1,250 a year

£1 million borrowed£2,500 a year

Interest is a deductible cost, so at 25 percent corporation tax every £250 costs £187.50.

How fast it reaches you

Within daysOverdrafts and loans priced over Bank Rate.

Next paymentTracker mortgages, which follow Bank Rate.

At renewalFixed rate loans, hire purchase and most asset finance.

Ahead of the BankNew fixed rate quotes, priced from where markets expect rates to go.

The point. The rise is small per pound and certain. What matters is how much of your borrowing floats.

Why it went up

3.5%inflation in September, up from 2.6 percent in June

+81%wholesale gas in the Bank’s forecast against July

+38%oil in the Bank’s forecast against July

Oil and gas are behind it. The Middle East conflict, now in its ninth month, has disrupted supply, and inflation has risen every month since June.

Inflation is rising, and the Bank expects more

June2.6%

July2.9%

August3.1%

September3.5%

Peak forecast, mid 20274.9%

The target2.0%

Inflation, consumer prices, percent. Sources, Office for National Statistics and the Bank of England.

The chain the Bank is trying to break

1Dearer oil and gas

2Higher bills and costs

4%Bank Rate acts here

3Bigger pay claims

4Higher prices for everything

The rise is aimed at the last two links, which economists call second round effects.

The Bank is acting before those links appear. Services inflation has held at 3.7 percent and private sector pay grew 3 percent over the year, so there is little sign of them yet. But the last energy shock took inflation to 11.1 percent in 2022, and a spiral of pay and prices is far harder to stop once it starts.

The point. The Bank cannot bring energy prices down. It is making money dearer so that dearer energy does not turn into dearer everything.

What it means for the economy

Slower growth is the price the Bank has chosen to pay.

Growth in the year to the end of 2027, percent

Previous forecast1.4%

New forecast1.0%

Source, Bank of England, November 2026.

Dearer borrowing slows spending, and that is the point. It leaves firms less room to raise prices, while higher energy and borrowing costs weigh on household spending and business investment at the same time.

Households are squeezed from both sides.Energy bills are expected to rise by about a quarter in January, and mortgage approvals fell 8 percent in the three months to September.

Smaller firms are expected to feel it most.Credit costs rise as demand slows. It shows first in the sales ledger, as slower payment and smaller orders.

Recent strength cuts the other way.Activity has been stronger than the Bank expected, so it fears firms can pass costs on. That argues for more, not less.

The point. The Bank is choosing slower growth over higher inflation. Watch for customers paying later and ordering less this winter.

Which one is you

The borrower

£200,000 of borrowing that tracks Bank Rate.

£500 morea year

At 4.25 percent it is £1,000 a year more than in October.

The saver

£100,000 in an account linked to Bank Rate.

£250 morea year earned

A current account still pays nothing, so idle cash now costs more.

The landlord

A £250,000 tracker over 25 years, by Moneyfacts’ figures.

£37 morea month

Individual landlords get relief only at the basic rate, so higher rate taxpayers carry more of it.

The energy user

A business contract renewing this winter.

No capon business energy

The Ofgem cap covers households only, so renewals are priced from wholesale markets.

The seller to households

A shop, restaurant or service.

About £430more a year on a typical home energy bill

That is the expected January rise, and it comes out of household spending.

The housing trade

A builder, agent or supplier.

8% fewermortgage approvals, three months to September

Dearer mortgages make that harder to turn round.

The point. Fixed rate borrowers feel nothing until the deal ends. That is the date to put in the diary.

What happens next

18 NOVOctober inflation is published. September was 3.5 percent.

17 DECThe Bank makes its next decision. Before this week’s vote, markets put about a one in four chance on another rise.

1 JANThe household energy cap is expected to rise to around £2,150, adding about 0.4 points to inflation.

4 FEBThe Bank decides again, with a full new forecast. Its own survey of market participants expects 4.25 percent.

The Governor does not see a long run of rises, but he has not ruled out another. Without real progress towards settling the conflict, he said, the risks to inflation lie on the upside.

Where inflation peaks

If energy stays high6.2%

Central forecast4.9%

If demand weakens4.8%

Peak inflation in the Bank’s three cases, percent. The central case is back to 2 percent by late 2028.

↑What would bring a rise on 17 December

October inflation above what the Bank expects
Oil and gas staying high
Pay and services inflation picking up

→What would keep it at 4 percent

Real progress towards settling the conflict
Spending and hiring weakening fast
Pay and services inflation easing

The point. February brings the Bank’s next full forecast, the natural moment for a second rise. Plan on 4.25 percent and test your numbers at 4.5.

Five things to do before 17 December

List the borrowing that floats.Every quarter point on £100,000 is £250 a year.

Put every fixed deal’s end date in the diary.That is when the rise reaches you, so talk to the lender before it.

Move idle cash to where it earns.A current account balance still earns nothing.

Check when your energy contract renews.There is no price cap on business energy.

Run your forecast at 4.25 percent, and test 4.5.That is where the market expects February.

Want your own numbers run at 4.25 percent?Thirty minutes, no jargon, no obligation. Book the free Clear Numbers call.

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Who we are

Zuizz Finance is an accountancy practice for owner managed and growing businesses, on fixed monthly fees.

For businesses that would rather not hire finance staff, we run the whole finance department as Smart Outsourcing.

The first step with anyone is a free 30 minute call about where their numbers are.

hello@zuizz.co.uk
020 7164 6601
www.zuizz.co.uk
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General information for UK businesses, not advice about your own position. Speak to a qualified adviser before you act.

Every figure comes from these sources, Bank of England, Monetary Policy Summary, November 2026, Bank of England, Monetary Policy Report, November 2026, Bank of England, why have interest rates gone up, Financial News, 5 November 2026, MoneyWeek, 5 November 2026, with the Moneyfacts mortgage figure, CNBC, 5 November 2026, market pricing from LSEG, BuyAssociation, 5 November 2026, Office for National Statistics, consumer price inflation, October 2022, GOV.UK, restricting finance cost relief for individual landlords. The worked examples are ours, calculated from Bank Rate.

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Bank Rate is 4 percent