Bank of England increases interest rates by 0.25%

Bank of England increases interest rates by 0.25%

05 Nov 2026

Emma Coleman, Head of Credit Research at XPS Group, commented: 
“The Bank of England increasing rates by 0.25% to 4% does not come as a big surprise and was more a case of when, not if.

“Inflationary pressures persist, with UK CPI rising to 3.5% in September and remaining above the Bank of England’s 2% target, leading markets to price in an expectation of this rate increase.

“Gilt yields rose sharply through September and early October as inflation concerns and rising global bond yields weighed on markets. However, John Healey’s Autumn Budget was generally seen as fiscally disciplined, supporting gilt markets and reversing some of those increases.

“Higher gilt yields have improved funding levels for many pension schemes. But geopolitical uncertainty and persistent inflation mean gilt market volatility is likely to remain elevated.

“While higher yields may seem like good news for pension schemes, greater stability would arguably benefit everyone.”