Bank of England expected to raise UK base rate from 3.75% to 4% at November meeting, its first hike in over three years, as inflation hits 3.5%

Analysts widely expect the Bank of England to raise its base rate by 25 basis points (hundredths of a percentage point) from 3.75% to 4% at its November 2026 Monetary Policy Committee meeting, what would be the first rate increase in more than three years. UK CPI (Consumer Prices Index) inflation reached 3.5% in the year to September 2026, up from 3.1% the month before and well above the Bank's 2% target. The Office for National Statistics attributed the acceleration primarily to sharp rises in petrol and diesel prices. The economic backdrop is shaped by the conflict involving the US, Israel and Iran, which has pushed up global energy and fuel costs. Oil prices rose sharply after the initial outbreak of conflict, fell back during ceasefire periods, then rose again when hostilities resumed in the Strait of Hormuz in July 2026. Household energy bills in the UK rose after price cap increases in July and October 2026. Most lenders have already priced an anticipated November rate rise into their current fixed-rate mortgage products. As of 3 November 2026, the average two-year fixed residential mortgage rate stood at 5.97% and the average five-year rate at 5.99%, according to financial information service Moneyfacts. The average two-year tracker rate was 4.67%. Around 500,000 homeowners have tracker mortgages that move directly with the base rate. An additional 500,000 are on standard variable rates (SVRs). The vast majority of mortgage customers, some 87%, are on fixed-rate deals. Around 800,000 fixed-rate mortgages with rates of 3% or below are expected to expire every year on average until end-2027, exposing those borrowers to sharply higher costs on remortgage.