EL7.AI
Central BanksMedium•5 November 2026•
1 min read

Bank of England Raises Rates to 4% and Warns of Persistent Inflationary Pressures

Key Facts

1The Bank of England raised the Bank Rate by 25 basis points to 4% following an 8–1 vote.
2Governor Andrew Bailey warned that the recent rate hike is unlikely to be the last unless the Middle East conflict is resolved.
3The Bank now projects UK CPI inflation will peak at 4.9% in Q2 2027, up from a previous forecast of 3.2%.

The Bank of England raised the Bank Rate by 25 basis points to 4% following an 8–1 vote by the Monetary Policy Committee. TradingNEWS reported that Governor Andrew Bailey warned the recent hike is unlikely to be the last unless the conflict in the Middle East is resolved, highlighting geopolitical risks to price stability.

The Bank significantly revised its UK CPI inflation forecast, now projecting a peak of 4.9% in the second quarter of 2027, up from the previous estimate of 3.2%. This hawkish shift follows data from November 5, 2026, showing the Construction PMI fell to 43.6, missing the forecast of 46.1.

Governor Andrew Bailey is scheduled to deliver another speech on November 9, 2026, which may provide further clarity on the central bank's response to persistent inflationary momentum.