# Bank of England hikes interest rate for the first time since Iran war, warns inflation will near 5%

- URL: https://talkfuse.com/story/bank-of-england-hikes-interest-rate-for-the-first-time-since-iran-war-warns-inflation-will-near-5/
- Published: 2026-11-05T14:18:19+00:00
- Original publisher: CNBC (publisher lean: Centre)
- Original article: https://www.cnbc.com/2026/11/05/interest-rates-inflation-uk.html
- Topics: Business, Economy, Middle East, UK, World

## Key points

- Bank Rate rises by 0.25 percentage points to 4%.
- The Bank warns inflation may approach 5%.
- One committee member argued for a larger increase.

## Summary

The Bank of England has raised its key interest rate by 0.25 percentage points to 4%, its first increase since August 2023. It warned inflation could approach 5% as the Iran war drives up energy costs, adding pressure on households and businesses through higher borrowing costs.

The Monetary Policy Committee voted 8 to 1 for the increase; the sole dissenter, Catherine Mann, favoured a larger rise of 0.5 percentage points, arguing inflation risks could become self-reinforcing. The Bank expects inflation to reach about 5% by mid-2027 before easing as energy price effects fade. Annual UK inflation was 3.5% in September, with motor fuels a major driver, and Governor Andrew Bailey said further rate rises could be considered depending on energy prices and inflation.

## Coverage

- [CNBC: Bank of England hikes interest rate for the first time since Iran war, warns inflation will near 5%](https://www.cnbc.com/2026/11/05/interest-rates-inflation-uk.html)
- [City AM: Why the Bank of England’s united interest rate hike signals more to come](https://www.cityam.com/why-the-bank-of-englands-united-interest-rate-hike-signals-more-to-come/)
- [City AM: Bank of England hikes interest rates to four per cent as inflation set to spike](https://www.cityam.com/interest-rates-hiked-to-four-per-cent-in-unanimous-vote/)

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.