# Bank of England urged to hike interest rates from four to five per cent

- URL: https://talkfuse.com/story/bank-of-england-urged-to-hike-interest-rates-from-four-to-five-per-cent/
- Published: 2026-11-11T00:01:00+00:00
- Updated: 2026-11-11T00:19:35+00:00
- Original publisher: City AM (publisher lean: Right)
- Original article: https://www.cityam.com/bank-of-england-urged-to-hike-interest-rates-from-four-to-five-per-cent/
- Topics: Business, Economy, UK, World

## Key points

- Niesr says rates should rise to five per cent.
- It warns inflation could stay above target for years.
- Higher borrowing costs could weigh on growth and public finances.

## Summary

The National Institute of Economic and Social Research (Niesr) has urged the Bank of England to raise interest rates to five per cent, warning that inflation could remain above target for years. It argues that acting sooner may limit the economic damage from persistent price rises and prevent higher inflation feeding into wage demands.

Niesr says inflation may peak above four per cent as about three quarters of UK workers agree pay settlements in the first three months of next year. The Bank forecasts a peak of 4.9 per cent by July next year and a return to its two per cent target in 2028, assuming energy prices fall; Niesr warns two further rate rises may not be enough. It estimates rates reaching 4.75 per cent could reduce GDP growth by 0.4 percentage points in 2028 and 2029, while higher debt costs could leave Chancellor John Healey up to £30bn short of meeting fiscal rules if he increases defence and care spending.

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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.