Bank Rate rises to 4% for first time in over three years

The rate decision, taken on 5 November 2026, was backed by eight of the nine members of the Monetary Policy Committee. The single dissenting member favoured a larger increase, to 4.25 per cent. The Bank cited higher energy prices as the primary driver of additional inflationary pressure — pressure that the House of Commons Library forecasts will push inflation above 4 per cent in early 2027.

The CBI’s November Economy in Brief, presented by Deputy Chief Economist Alpesh Paleja, examined the implications of both the rate decision and Budget 2026 for UK businesses and the wider economy. The briefing’s full content was access-restricted in the social-media post.

Budget 2026 set out £120 billion of additional public investment over the Parliament compared with previous plans. The Government said its fiscal strategy was designed to support price stability while reducing borrowing — the deficit stood at 4.4 per cent of GDP in the previous year, which HM Treasury described as the lowest level for six years.

The rate rise is the first since August 2023, ending more than three years of holds. Higher rates generally push up borrowing costs for households and businesses on variable-rate deals, while potentially improving returns for savers.

Budget 2026 included plans for a Strategic Authority for Kent and Medway. Whether it takes a mayoral or foundation-based form will depend on the outcome of local government reorganisation in the area.

The Bank of England’s Governor cautioned that the increase should not be read as the start of an inevitable sequence of further rises. Whether that holds will depend in part on how energy prices and inflation develop into 2027 — figures that are, as yet, uncertain.