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November 05, 2026BANK OF ENGLAND MONETARY POLICY The Monetary Policy Committee (MPC) of the Bank of England voted to raise the Bank Rate 25 basis points to 4.0% at its November meeting.
The conflict in the Middle East, now in its ninth month, remains the dominant source of uncertainty for the inflation outlook. Global energy prices have continued to rise from an already elevated level. While monetary policy cannot directly influence global energy prices, the MPC stated that policy will be set to ensure inflation returns sustainably to the 2% target as the economy adjusts to the energy shock. The policy response required will depend on the scale and persistence of the shock and how it propagates through the economy. The Committee judged that the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate.
CPI inflation increased to 3.5% in September, up from 3.1% in August. Inflation is now expected to rise to around 3.8% by the end of 2026, 4.0% by the end of 2027, and return to 2.0% target by the end of 2028. The outlook for indirect effects on inflation would depend on the duration of the energy shock, and the extent to which firms could bear down on other costs or rebuild their margins in a stronger demand environment.
UK economic activity data in recent months have generally been stronger than expected. Stronger global growth, support from domestic AI-activity, and greater than expected wanning of the impact of monetary policy tightening in previous years supported growth and offset the drag from energy prices. This support is expected to diminish going forward. UK GDP is forecast at 1.6% in 2026, 1.3% in 2027, and 1.2% in 2028. The MPC noted that labour market remains resilient and is showing signs of stabilisation. Unemployment rate is forecast at 4.8% in 2026, 4.9% in 2027, and 5.1% in 2028.
The MPC emphasized that monetary policy is not on a pre-set path. The Committee will continue to assess the evidence at each meeting, in particular how likely high energy prices are to feed through to other prices and the economy more broadly, and will adjust Bank Rate as necessary to ensure inflation returns to the 2% target in the medium term.
The next scheduled MPC monetary policy announcement is due on 17 December 2026.
Source: Bank of England, Monetary Policy Summary and Minutes, November 2026; Monetary Policy Report, November 2026
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