Bank of England Raises Rates to 4% in an 8-1 Vote, Its First Hike Since 2023, as Energy Pushes Inflation Toward 5%

Published November 7, 2026 (Bank of England decision of November 5). Market data as of November 6.

The Bank of England raised its Bank Rate by a quarter point to 4% on Thursday, Nov. 5, in an 8-1 vote, ending more than two years without a rate increase as Middle East energy prices push UK inflation higher.

The move reverses the direction of British monetary policy. The Bank last raised rates on Aug. 3, 2023, then cut six times to 3.75%, where the rate had sat since Dec. 18, 2025, according to the Bank's official rate history. It now joins Australia, whose central bank hiked to 4.85% two days earlier, and a Federal Reserve that raised rates in September.

"The degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate," the Monetary Policy Committee said in its policy summary and minutes. Catherine Mann was the only dissenter, and she wanted a bigger half-point move to 4.25%.

Why the Bank of England changed course

Energy is the main driver. The minutes say the front-month Brent crude contract averaged $108 a barrel and UK gas 216 pence per therm over the 15 working days to Oct. 27. That is 38% and 81% higher than at the time of the Bank's July forecast.

UK consumer prices rose 3.5% in the year to September, and the Bank estimates that energy alone added about one percentage point. Staff now project inflation of around 4.5% in the first quarter of 2027 and around 5% in the second. Mann put the mid-2027 peak at 4.9% in her own statement.

The economy has also held up better than feared. "Activity data in recent months have generally been stronger than expected, adding to the case for modestly tighter monetary policy," the committee wrote. Benchmark two-year mortgage rates have already risen by nearly 50 basis points since early September, the minutes noted.

By BullishStation's count, the new 4% rate sits only 0.5 point above September inflation. If prices rise as fast as the Bank expects, the real rate would turn negative by about one point next year, which helps explain why several members said one hike may not be enough.

The committee did not speak with one voice on what comes next. Governor Andrew Bailey wrote that "the case is clear for a 25-basis point rise now" and said he could see the argument for a further increase if energy risks do not ease. Chief economist Huw Pill went further: "a single 25-basis point hike is unlikely to be sufficient." External member Alan Taylor pushed the other way, calling the move a "one-for-now" insurance hike and warning that "this is not the start of a hiking cycle."

What a global turn in rates means for crypto

The link to crypto runs through the cost of money. When several major central banks raise rates at once, cash and short-term bonds pay more, the dollar and sterling yields climb, and investors demand more to hold assets with no yield, such as Bitcoin. Our guide to how central bank rates affect Bitcoin walks through each channel.

Bitcoin's first reaction was modest. It stood near $80,300 on Coinbase at noon London time, when the decision came out, and around $79,600 an hour later, a 0.9% dip by our count. The larger slide came later in the US session: Bitcoin ended Nov. 5 near $75,970, down about 5.5% on the day, alongside $430.2 million of net outflows from US spot Bitcoin ETFs, according to Farside Investors. The Bank's decision was one factor among several that day, not the only one.

The Bank also kept shrinking its bond holdings. Its stock of UK government bonds held for monetary policy stood at £362 billion on Nov. 4, the minutes said, another form of tightening that removes liquidity from markets.

History offers a guide. In its last hiking cycle, the Bank raised rates 14 times between December 2021 and August 2023, from 0.1% to 5.25%. This time it starts from a much higher base, and members such as Taylor openly reject the idea of a long series. Energy prices, not domestic overheating, are setting the pace, which makes the path far harder to predict.

The next dates are close. The Bank's next decision is due on Dec. 17, 2026, a week after the Fed meets on Dec. 8 and 9, as tracked in our Fed rate decisions tracker. US inflation for October, due on Nov. 10, will show, after September's 3.7% reading, whether the same energy shock is spreading across the Atlantic. Friday's strong US jobs report has already put a December Fed hike back in play.

Latest: China's central bank adds 26 tonnes of gold in October as prices slide

Related: Macroeconomics explained for crypto investors · US CPI and crypto tracker

Sources: Bank of England, Monetary Policy Summary and minutes of the meeting ending Nov. 4, 2026 (published Nov. 5); Bank of England official Bank Rate history; Farside Investors; Coinbase BTC-USD data.

This article is for information only and is not investment advice. Crypto assets are volatile and you can lose money.