Bank of England raises rate to 4%; lone dissenter wanted a larger hike

Eight backed 25 basis points; one wanted 50

The Bank of England announced on November 5 that it was raising Bank Rate by 25 basis points, or 0.25 percentage points, to 4%. The meeting ending November 4 approved the move by 8–1. Catherine L Mann, the sole dissenter, preferred a 50-basis-point increase to 4.25%. All nine members supported a rate rise.^[1]

Concern over energy costs spreading through the economy

The accompanying Monetary Policy Report puts September’s annual CPI inflation at 3.5% and forecasts around 5% by mid-2027. The latter is a projection. Higher energy prices are directly lifting fuel and household utility costs, while evidence of spillovers into other prices and wages remains limited.^[2]

The Bank judges that a larger, longer-lasting energy cost shock, alongside stronger-than-expected activity, creates enough prospective inflation pressure to justify tightening now. Its report also considers a different scenario: weaker demand could limit companies’ ability to raise prices.^[2]

Agreement today does not settle the next move

Among those supporting 25 basis points, Huw Pill argued that one increase might not be enough. Alan Taylor treated it as a risk-management move and cautioned against assuming a predetermined hiking cycle. The Committee will keep assessing wages, business pricing and spare capacity at each meeting, with the aim of returning inflation to its 2% target.^[1]

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