The Bank of England is widely expected to raise interest rates on Thursday 5 November, in what would be its first rate rise since August 2023. Markets are pricing roughly a 96% chance of a quarter-point increase, taking Bank Rate from 3.75% to 4%.

The nine-member Monetary Policy Committee will announce its decision at noon on Thursday, alongside new economic forecasts and the November Monetary Policy Report. At its September meeting the committee voted 6-3 to hold Bank Rate at 3.75%, with three members already voting for a rise to 4%.

Why a rise is now expected

The Bank targets consumer price inflation of 2%. The Office for National Statistics reported inflation of 3.5% in the 12 months to September 2026, up from 3.1% in August, according to both Morningstar and Money to the Masses. Morningstar links the shift to expectations that prices will keep rising into 2027 because of the war with Iran, while Money to the Masses points to energy costs and the Bank's concern about "second-round" effects, where higher prices feed into wage demands and business costs.

A Reuters poll of economists cited by Money to the Masses points to a 7-2 vote in favour of a rise this time, while other forecasters, including Deutsche Bank, have forecast a 6-3 vote. Morningstar reports derivatives markets implying a 96.7% chance of an increase; Money to the Masses puts the priced chance at 96%. Either way, a rise is expected, not decided — the committee could still hold.

What it would mean for households

Mortgage costs have already been climbing ahead of the decision. Money to the Masses, citing Moneyfacts, reports the average rate on new mortgages at 5.89%, up from 5.83% at the start of October, and the average two-year fixed rate at 5.97%, its highest since December 2023. Tracker and standard variable rate mortgages usually change soon after a base-rate move, while fixed deals do not change mid-term. Savers with variable-rate accounts may see higher interest, though providers are not required to pass a rise on in full or immediately. This is market news, not personal financial advice.

Sources: Morningstar UK, Will the Bank of England Raise Interest Rates to 4% This Week?, 2 November 2026; Money to the Masses, Bank of England set to raise rates, 4 November 2026.