Evening edition · Tuesday, 3 November 2026
3.75% to 4.0% on Thursday, and the harder question is what comes after
The Bank of England is expected to make its first hike since 2023; the argument is about the three or four that markets have already pencilled in.
On Thursday the Bank of England is expected to raise Bank Rate to 4.0% from 3.75%. Economists polled by Reuters expect it, and it would be the first increase since August 20231. The reason is energy. Consumer prices rose 3.5% in the year to September, against the Bank’s July forecast of 3.0%, and in September it warned that inflation would rise above 4% early next year1.
The Committee is not of one mind. It voted 6–3 to hold in September, and the Reuters poll points to 7–2 for a hike this time, with the external members Alan Taylor and Swati Dhingra seen as the likeliest to vote for no change1. “Their hands are increasingly being forced, whether they like it or not,” said Stefan Koopman of Rabobank1.
The interesting part is what comes next. Markets price three to four more quarter-point hikes in 2027, which would take Bank Rate to between 4.75% and 5.0%1. Even the hawks may not want to sign up to that. Oxford Economics thinks the minutes, or the Governor, Andrew Bailey, may signal that the rate is unlikely to reach the level priced in1. Catherine Mann has argued that part of that pricing is a risk premium the Bank created itself by waiting and seeing1.
There is a quieter test as well: the Bank’s first assessment of the budget John Healey presented last week, whose help for households and drivers economists expect to shave only a little off inflation1. Forecasts, votes and a budget check all arrive at 13:00 CET on Thursday. If you have a tracker mortgage or a savings account in sterling, that is your appointment. Nothing here is investment advice.
What to watch
- Thursday 5 Nov, 13:00 CET: Bank of England decision, minutes and forecasts; press conference at 13:30 CET.
- The vote split and the individual members' statements, which say more about 2027 than the headline rate.
A central bank earns credibility in the meeting where it does what it said, and keeps it in the meeting where it says no more than it means.
Sources
- Bank of England poised to raise rates but may push back on bets for more — Reuters (via Investing.com), 2 Nov 2026.
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