Bank of England raises base rate

November 12, 2026 by Brendan O'Neill

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The Monetary Policy Committee for the Bank of England has opted to raise the base rate to 4%, following an 8-1 vote.

It is not a decision that will come as much of a surprise to either mortgage advisors or lenders. It is the first time the base rate has gone up in three years, but most industry observers were forecasting it. This is reflected in the almost unanimous nature of the voting. The only dissenter disagreed on the level of the raise, rather than the policy itself – as they were seeking an increase to 4.25%.

The rate had previously been set at 3.75%, but inflation has become a problem again for the UK economy. In August, it stood at 3.1%, but the following month saw it increase to 3.5%. This was the third month in a row where it went up, and it was a bigger increase than had been anticipated. This made a base rate rise inevitable.

Over the next few months, inflation is expected to reach a peak of 5% before starting to come down again. By the second half of 2027, the effect of energy price rises will lessen and tighter monetary policy will tell.

Nonetheless, the current base rate increase will mean more pain for many mortgage holders. Advisors will have to wait and see how lenders respond to the decision, but borrowers on standard variable rate mortgages will be among those worried about what it will mean for them.

Mortgage advisors who have the CeMAP qualification can promote their services to borrowers in this situation.