Bank of England Lifts Bank Rate to 4% on an 8–1 Vote

The Bank of England raised Bank Rate by 0.25 percentage points to 4% on Thursday, Nov. 5. According to the Bank of England's November 2026 summary and minutes, at its meeting ending on Nov. 4 the Monetary Policy Committee "voted by a majority of 8–1 to increase Bank Rate by 0.25 percentage points, to 4%." One member voted to increase Bank Rate by 0.5 percentage points, to 4.25%.

The Bank said the conflict in the Middle East is now in its ninth month and that global energy prices have continued to rise from an already elevated level. UK CPI inflation increased to 3.5% in September, and the Bank said it is now expected to rise to around 5% by the middle of next year before it is projected to fall.

The statement said there remains limited evidence of knock-on effects on other prices and wages. It added that "the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate." Activity data in recent months have generally been stronger than expected, the Bank said, adding to the case for modestly tighter monetary policy.

The minutes give figures for the energy backdrop. The front-month Brent crude futures contract averaged $108 per barrel, and the UK front-month natural gas contract 216 pence per therm, over the 15 UK working days ending Oct. 27. The minutes said those levels were 38% and 81% higher than at the time of the July Monetary Policy Report. Direct energy effects contributed around 1 percentage point to the September CPI reading of 3.5%, most of it driven by fuels, according to the minutes.

Bank staff's latest near-term projection, based on energy prices over the same window, was for headline CPI inflation to reach around 4½% in 2027 Q1 and around 5% in 2027 Q2. The minutes also said agency intelligence suggested many firms were absorbing higher costs partly through lower profit margins.

The CFTC's Commitments of Traders report is published weekly by the U.S. Commodity Futures Trading Commission and shows the futures positions held by groups of large traders as of Tuesday. The latest report predates the Bank of England release. Large speculators held a net short of 79,414 contracts in CME British pound futures as of Tuesday, Oct. 27, according to the report released Oct. 30. The previous week's net short was 80,420 contracts, a weekly change of 1,006 contracts, or 0.4% of open interest of 253,937 contracts. Those positions were held before the Bank of England release. Pound futures are priced in US dollars per pound, so a net long is positioned for a higher GBP/USD. More history sits on AlphaScala's British pound COT page.

The 3-year COT index places the latest net position within its range over the past three years, with 0 the lowest net position in that window and 100 the highest. The index stood at 11. The three-year low for the net position was a net short of 106,964 contracts on Oct. 13, 2026. The three-year high was a net long of 142,183 contracts on July 23, 2024.

GBP/USD was at 1.34537 as of 12:00 UTC on Nov. 5, according to AlphaScala's GBP/USD market page.

The Bank said monetary policy "is not on a pre-set path." It added that the Committee "will adjust Bank Rate as necessary to ensure CPI inflation returns to the 2% target in the medium term."