The Bank of England has raised interest rates for the first time in more than three years, lifting Bank Rate to 4% from 3.75%.
The Monetary Policy Committee voted 8-1 in favour of the quarter-point rise. Catherine Mann was the only member to dissent, preferring a larger half-point increase to 4.25%.
The Bank said inflation is likely to reach around 5% in the middle of next year, more than double its 2% target. Consumer price inflation had already risen to 3.5% in September, driven by higher energy costs.
“Today’s increase shouldn’t be seen as the first in an inevitable long sequence of hikes. But unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase,” Governor Andrew Bailey said.
Deputy Governor Clare Lombardelli said a further rate rise was likely to be needed in the near term.
The Bank also revised up its growth forecasts to 1.6% for this year and 1.3% for next year. Under its central forecast, inflation is not expected to return to 2% until the third quarter of 2028.
Source: Reuters — https://www.reuters.com/business/bank-england-raises-rates-first-time-since-2023-says-more-may-come-2026-11-05/
