Bank of England raises Bank Rate to 4% as inflation outlook worsens
The MPC voted 8–1 for a quarter-point increase after UK CPI reached 3.5% and the Bank projected inflation near 5% in mid-2027.
The Bank of England raised Bank Rate by 0.25 percentage points to 4% at the Monetary Policy Committee meeting ending 4 November, tightening policy as higher energy prices worsen the inflation outlook.
Inflation pressure from energy
The Bank said UK CPI inflation had reached 3.5% in September and was expected to rise to around 5% by the middle of 2027 before falling as the energy shock fades and restrictive policy weighs on demand. The MPC said it would monitor pay, pricing behaviour and economic slack rather than follow a preset rate path.
The decision came as the Bank reported higher global energy prices linked to the prolonged conflict in the Middle East. It said the direct effect on household and business energy bills was clear, while evidence of broader second-round effects on wages and other prices remained limited.
Sources
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