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United Kingdom

Bank of England raises interest rates to 4% on energy-driven inflation

The first rate rise since 2023 raises borrowing costs for households and firms and signals further increases may follow, affecting lenders and investment plans.

Photo: Ugur Akdemir, Unsplash

What happened

The Bank of England raised Bank Rate by 0.25 percentage points to 4% on 5 November, its first increase since August 2023. trans.info+2 The Monetary Policy Committee voted 8 to 1, with one member, Catherine Mann, wanting a bigger rise to 4.25%. trans.info+2 The increase was driven mainly by energy prices linked to the conflict in the Middle East, with CPI inflation at 3.5% in September. trans.info+2 The Bank expects inflation to reach around 5% by mid-2027. trans.info+2

Around it

Logistics UK warned of delayed investment in vehicles and warehouses, falling freight volumes and the biggest impact on small and medium-sized firms. trans.info Bank of England Chief Economist Huw Pill said rates have no preset path after next spring and could hold or fall if UK growth stalls. BigGo Finance The Bank said economic activity has been stronger than expected, and it warned of building inflationary pressure in business pipelines. trans.info+1

What comes next

The next Bank of England rate decision is due on 17 December. trans.info Third-quarter GDP figures are due for release on 12 November. rsmuk.com+1

Sources

  1. rsmuk.comThe Week Ahead: Bank of England takes a tougher stance as global risks grow
  2. trans.infoInterest rates rise to 4%: what it means for UK hauliers
  3. Jones Financial WebsiteNews in Review
  4. fourfifty.co.ukCosts of borrowing up |
  5. economies.comBritain's economic growth faces a crucial test after the BoE's first rate hike in three years
  6. BigGo FinanceBOE's Pill Signals Open Door to Rate Cuts If UK Growth Stalls

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