A brass gauge labelled Bank Rate on a desk with a house key, a savings passbook, pound coins and a pencil

The Savvy Investor's Guide

Bank of England raises Bank Rate to 4%: what it means for mortgages, savings and annuities

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James Heppe-Smith

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By James Heppe-Smith · 5 November 2026 · 8 min read

The Bank of England raised Bank Rate from 3.75% to 4% on 5 November 2026, its first rise since August 2023. Eight of the nine members of the Monetary Policy Committee voted for the quarter-point rise, and the ninth wanted a half point.

Educational, not advice. This article sets out the Bank of England’s interest rate decision of 5 November 2026 and what it changes for borrowers, savers and people buying an annuity, using the Bank’s own announcement and published figures. It is general information, not personal financial advice. Savvy Investor Guide is not authorised or regulated by the Financial Conduct Authority. Nothing here tells you what to do with your mortgage, savings or pension.

What this article covers: what the Monetary Policy Committee decided, what markets and economists expected beforehand, the inflation and energy figures behind it, and what it means for mortgages, savings, annuities and readers in the US with UK money.

What it does not cover: a forecast of where Bank Rate goes next. The Bank does not commit in advance, and neither does this article.

In short

  • Bank Rate is now 4%. The Monetary Policy Committee voted 8 to 1 to raise it by 0.25 percentage points. The one dissenter wanted a bigger rise, to 4.25%. Nobody voted to hold.
  • It was expected. Markets had priced a rise as close to certain, and 27 of 30 research houses surveyed by FXStreet expected one. The vote was more one-sided than the 7 to 2 a Reuters poll had pointed to.
  • Energy-driven inflation is the reason. CPI rose to 3.5% in September. The Bank now expects it to reach around 5% by the middle of 2027 and to return to its 2% target in the third quarter of 2028.
  • Mortgages: tracker rates rise by 0.25 points. On a £200,000 tracker over 25 years that is about £29 a month more. Fixed rates had already risen before the decision.
  • Savings: variable and easy-access rates are the ones that follow Bank Rate, usually within weeks. On 5 November the best easy-access account on Moneyfacts paid 5.00% and the best one-year fix 5.20%.
  • Next decision: Thursday 17 December 2026.

What the Bank of England decided

At its meeting ending on 4 November, the Monetary Policy Committee voted by eight to one to raise Bank Rate by 0.25 percentage points, to 4%. The Bank’s own Bank Rate table records the change from 5 November. Andrew Bailey, Sarah Breeden, Swati Dhingra, Megan Greene, Clare Lombardelli, Huw Pill, Dave Ramsden and Alan Taylor voted for the quarter-point rise. Catherine L Mann voted for half a point, to 4.25%.

The Bank’s reasoning fits in two lines of its Monetary Policy Summary. It said there “remains limited evidence of knock-on effects on other prices and wages”, but that “the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate.” It added that activity data had “generally been stronger than expected, adding to the case for modestly tighter monetary policy.”

That is a marked shift from September, when the Committee held Bank Rate at 3.75% by six votes to three, with Megan Greene, Catherine Mann and Huw Pill voting to raise it to 4%. This time Swati Dhingra and Alan Taylor, who had voted to hold in September, voted to raise, and Mann asked for twice as much as before.

What markets and economists expected

Going into the meeting, a rise was close to fully priced. IG’s preview on 2 November described “investors and most analysts expecting the Monetary Policy Committee (MPC) to lift Bank Rate by 25bps to 4% from 3.75%”. FXStreet, citing LSEG data, reported that money markets fully priced four quarter-point rises by September 2027, which would take Bank Rate to 4.75%, and that 27 of 30 research houses expected a rise at this meeting.

Economists were less sure about what comes after. Reuters reported on 2 November that its poll pointed to a 7 to 2 vote for a rise, and that economists “were split on whether further hikes would follow after November’s”. The Bank did not settle that. Its Summary repeats that “Monetary policy is not on a pre-set path” and that the Committee “will adjust Bank Rate as necessary to ensure CPI inflation returns to the 2% target in the medium term.”

The Committee is split on what comes next

The minutes set out each member’s view, and they point in different directions. Huw Pill wrote that “a single 25-basis point hike is unlikely to be sufficient”. Clare Lombardelli wrote that, without evidence of weaker inflation pressures, “there is likely to be a case for a further increase in rates in the near term”, and Megan Greene wrote that “Additional hikes will likely be required going forward”. Andrew Bailey said that without news that softens the inflation risks, he could “see the argument for a further increase in rates”. At the press conference, as reported by the BBC, he said the decision “shouldn’t be seen as the first in an inevitable long sequence of hikes”, but that “unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase”.

Alan Taylor took the opposite line. He called this “a risk-management ‘one-for-now’ insurance hike” and wrote that “The next move could be up, down, or sideways.” Swati Dhingra said that before supporting a higher rate “for an extended period” she would need clear evidence of stronger pricing power and wage and price pressures feeding each other.

Markets are pricing in more than the Bank’s own survey of market participants expects. The market curve the Bank used for its forecasts rises to around 4.9% by the end of 2027. The median answer in the Bank’s November Market Participants Survey was 4.25% in February and 3.5% two and three years ahead. The Bank says the gap suggests risk premia, not only expected rate rises, are in market prices.

Why: inflation, energy and the November forecasts

Consumer prices rose 3.5% in the 12 months to September 2026, up from 3.1% in August, according to the Office for National Statistics. Core inflation, which leaves out energy, food, alcohol and tobacco, rose to 2.8%, and services inflation to 3.7%. The minutes say direct energy effects contributed around 1 percentage point of the 3.5%, mostly through fuels. Oil and gas futures averaged $108 a barrel and 216 pence a therm in the 15 working days to 27 October, 38% and 81% higher than at the time of the July Report.

The rest of the economy has held up. GDP grew 0.7% in the three months to August. Unemployment was 4.7% in June to August, and regular pay was growing at 3.7% a year. The minutes describe “further evidence of the resilience of activity despite higher energy prices”, helped by exports and some boost from artificial intelligence.

The November Monetary Policy Report puts numbers on the outlook. In the Bank’s central projection, CPI inflation is 3.8% at the end of 2026 and 4.0% at the end of 2027, against 3.2% and 2.1% in the July Report, and reaches the 2% target in the third quarter of 2028. Annual GDP growth slows from 2.2% at the end of 2026 to 1.0% at the end of 2027, and unemployment edges up from 4.8% to 5.0%, then 5.1% at the end of 2028. The projection assumes Bank Rate follows market pricing, and the Budget of 28 October is expected to take around a quarter of a percentage point off inflation by mid-2027. The Report also sets out two scenarios: one where energy prices stay higher for longer, and one where demand weakens.

What it means for mortgages

If you are on a tracker mortgage, your rate follows Bank Rate directly, usually from the next payment date or within a month; your lender will write to you. Standard variable rates are set by each lender and usually move soon after. As an illustration, on a £200,000 repayment tracker over 25 years at Bank Rate plus 0.75 percentage points, the rate goes from 4.5% to 4.75% and the monthly payment from about £1,112 to about £1,140, roughly £29 a month more. Your own margin and balance will give a different figure. UK Finance, the banking trade body, told the BBC that around 510,000 tracker borrowers face “a £31 monthly jump in repayments”. Nationwide said on 5 November that its tracker customers’ rates rise by 0.25 points from 1 December, and that its Standard Mortgage Rate rises to 6.74% on the same date.

Fixed-rate deals had already priced the rise. The minutes note that benchmark two-year mortgage rates “had risen by nearly 50 basis points since the beginning of September.” Moneyfacts puts the average two-year fix at 5.97% at the start of November, up from 5.59% at the start of September, and the average five-year fix at 6.00%, up from 5.63%. Its Average New Mortgage Rate reached 5.89%, a three-year high, and the average standard variable rate was 7.13% on 1 November. Fixed rates follow swap rates, which move on expectations, so a decision that markets had already priced changes little for new fixes on the day. Our record of the September lender repricing and account of how UK mortgage rates turned back up cover the run-up.

What it means for savers

The best savings rates were already above Bank Rate. On the afternoon of 5 November Moneyfacts listed a top easy-access rate of 5.00% AER and a top easy-access cash ISA of 5.02%, with the best fixed rates at 5.20% for one year, 5.30% for two years and 5.40% for five years. Those are best buys, not typical rates: Moneyfacts puts the typical easy-access account at 2.56% at the start of November, and a selection of easy-access accounts from big UK banks at 1.16% on average. Nationwide and Virgin Money said on 5 November they will raise variable savings rates by up to 0.25 points from 1 December. Easy-access and variable cash ISA rates are the ones that follow Bank Rate, usually within weeks, and some banks pass on less than the full change. Fixed rates are set by expectations and had already risen before the decision.

Tax takes a larger share of that interest from April 2027, when the rates on savings interest rise to 24%, 44% and 49%. The Budget kept the cash ISA limit at £20,000. Our guide to what the 2026 Budget changes for savers and investors has the detail.

What it means if you are buying an annuity

Annuity rates follow long-term gilt yields more than Bank Rate; our explainer on gilt yields sets out why. The 10-year gilt yield was 5.15% on 5 November, according to Trading Economics, 0.25 points lower than a month earlier. On 5 November Hargreaves Lansdown’s best-buy table showed £8,209 a year for a 65-year-old using £100,000 to buy a level, single-life annuity with no guarantee period, and £5,641 a year for one that rises with RPI and has a five-year guarantee. An annuity quote depends on where gilt yields go over the coming months, and those respond more to the inflation outlook in the Bank’s forecast than to one Bank Rate decision. Our guide to annuities in 2026 explains how a quote is built.

For US readers with UK money

For readers in the US who hold UK savings, a UK mortgage or a UK pension, the decision matters in two ways. A rise in Bank Rate lifts what UK variable savings accounts pay and what UK tracker mortgages cost. It also tends to support the pound against the dollar if it is larger or more hawkish than expected, and to weaken it if the Bank signals fewer rises than markets had priced. On the day the pound barely moved: FXStreet reported GBP/USD at 1.3467 at 15:27 GMT, “virtually unchanged”, as strong US jobs data and Federal Reserve comments supported the dollar. Interest from UK accounts can still be taxable in the US; how double taxation is relieved depends on the UK-US tax treaty and your own position. For how the Federal Reserve’s decisions do and do not reach US mortgages, see why US mortgage rates don’t follow the Fed.

What happens next

  • 17 November: the next labour market figures from the ONS.
  • 18 November: October inflation figures.
  • 17 December: the Bank’s next interest rate decision, with minutes the same day.
  • 4 February 2027: the decision after that, with the next Monetary Policy Report.

Frequently asked questions

What is the Bank of England base rate now?

4%, from 5 November 2026, after the Monetary Policy Committee voted 8 to 1 to raise it from 3.75%. It was the first rise since August 2023.

Will my mortgage payments go up?

If you have a tracker mortgage, yes, usually from your next payment, by the 0.25 point rise in Bank Rate. Standard variable rates are set by each lender and often follow. If you are on a fixed rate, your payments stay the same until the fix ends; the rate you move onto then depends on fixed rates at that time.

Will savings rates go up?

Variable rates on easy-access accounts and cash ISAs usually follow a change in Bank Rate within weeks, though not always in full. Fixed rates are set by expectations and had already risen before the decision.

Will the Bank of England raise rates again?

The Bank has not said. Its Summary states that monetary policy “is not on a pre-set path”, and the minutes show members split, from Huw Pill, who expects more tightening “including in the near term”, to Alan Taylor, who called this a “one-for-now” rise.

When is the next Bank of England decision?

Thursday 17 December 2026, according to the Bank’s published schedule. After that, 4 February 2027, with the next Monetary Policy Report.

The Savvy Investor’s take

The decision itself was no surprise. The vote was. Two members who held in September voted to raise, and the one who wanted more asked for double. Even so, three different paths are on the table at once: markets price Bank Rate near 4.9% by the end of 2027, the Bank’s own survey of market participants expects 4.25% by February and then lower, and the Committee’s members range from those expecting further rises to Alan Taylor’s “up, down, or sideways”. The next two inflation releases and the December meeting will show which of those the data supports. Until then, the figure that matters most to a household is the one in its own mortgage offer or savings account.

Sources

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