Bank of England Raises Base Rate to 4% in November 2026 MPC Decision

The Quick Take

• The Bank of England's Monetary Policy Committee raised the base rate to 4% at its November 2026 meeting
• The decision marks the latest step in the BOE's tightening cycle amid persistent inflationary pressure in the UK economy
• Governor Bailey has signalled further hikes remain conditional on inflation trajectory and geopolitical energy risks

The Bank of England's Monetary Policy Committee formally raised the Bank Rate to 4% at its November 2026 meeting, the official decision matching the market consensus expectation. The rate now sits at a level not seen in roughly 15 years, reflecting the cumulative tightening the MPC has implemented since the initial post-pandemic inflation surge. The formal MPC minutes provide the authoritative policy framework that GBP-denominated fixed-income markets price against, with the yield curve adjusting to incorporate both the delivered decision and Bailey's forward-guidance language on additional hikes.

A 4% base rate restructures the economics of UK mortgage lending and consumer credit: tracker-mortgage holders see immediate payment increases, while fixed-rate product pricing shifts the refinancing cost for the 1.4 million UK households whose fixed deals expire in the next 12 months. UK banks — particularly Barclays, NatWest and Lloyds — benefit from wider net interest margins in the near term, but face a lagged credit-quality deterioration risk as higher servicing costs stress household balance sheets. FTSE 250 property companies face incremental yield-gap compression.

Watch the BOE's inflation forecast revision in the November Monetary Policy Report — a forecast showing CPI above 5% into mid-2027 makes a December hike near-certain. The critical variable is UK wage growth: if the ONS November earnings data prints above 7% year-on-year, the MPC will find it difficult to pause. Any moderation in wage settlements in the November data, however, could allow the MPC to hold at 4% and assess whether the cumulative tightening is slowing demand sufficiently.

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