Bank of England Poised for November Rate Hike to 4% Amid Inflation Pressures
Economists anticipate a Bank of England interest rate hike to 4% in November as inflation concerns persist. Explore the latest monetary policy outlook.
POLICY WIRE — Bengaluru, India — The Bank of England is widely expected to implement a 25 basis point interest rate hike during its November 5 policy meeting, bringing the benchmark rate to 4.00%. This consensus emerged from a recent survey of 63 economists, 54 of whom anticipate the increase as the central bank grapples with persistent inflationary pressures.
The move would mark the first rate increase in over three years, breaking a cycle of stability that saw no changes to monetary policy across the previous six meetings. While the Bank of England maintained rates at 3.75% on Thursday, officials have signaled that inflation could climb above 4% early next year.
UK consumer inflation reached 3.8% in September, nearly double the central bank’s 2% target. Despite this, approximately 87% of the 61 respondents in an October 22 to 28 poll believe the Bank Rate will remain at 4.00% following the November 6 decision, suggesting a potential pause in further tightening.
The outlook remains divided regarding the long-term trajectory. Nearly half of the economists surveyed, 30 out of 61, anticipate an additional rate hike in the first quarter of 2027, though expectations for the remainder of that calendar year remain at 0%.
This shift in policy arrives just ahead of a critical government budget announcement scheduled for November 26, which is widely expected to include tax increases. Since August 2024, the central bank has reduced rates by 125 basis points, but current economic conditions are forcing a pivot toward a more cautious monetary stance.
Reporting by Policy-Wire (PW)
