The Bank of England is widely expected to raise interest rates on Thursday, 5 November 2026, in what would be its first increase in borrowing costs since August 2023. Financial markets and economists polled by Reuters expect Bank Rate to rise from 3.75% to 4.0%.

Why pressure has grown

The case for a rise has strengthened since official figures showed Consumer Prices Index inflation at 3.5% in the year to September, above the Bank's 2% target and above its earlier forecast. Reuters reports that economists expect the Bank to act on energy-driven price pressure rather than wait for conclusive proof that higher prices are feeding into wages and broader price-setting.

Governor Andrew Bailey has previously said the Bank cannot wait for conclusive proof of those second-round effects, or it will act too late. The Monetary Policy Committee was divided in September, voting 6-3 to hold rates, and Reuters reports that disagreement over how much evidence is enough has continued.

What to watch on Thursday

The decision is due at 12:00 GMT on 5 November, alongside the Bank's quarterly Monetary Policy Report and updated forecasts. Attention will focus on the vote split and on whether the Bank pushes back against market expectations of further rises next year.

For households, a rise would matter through mortgage and loan pricing, although the effect depends on individual deals and lenders' decisions. Unemployment, at 4.7% in the three months to August, and the Government's recent Budget are also part of the backdrop the Committee will weigh. No decision has been made yet: this is an expectation, not an outcome. Sources: Reuters and Gazette & Herald.