Bank Rate is 4 per cent. Check what your lender can charge this week

The Bank of England’s Monetary Policy Committee raised Bank Rate from 3.75 per cent to 4 per cent on 5 November 2026, an increase of a quarter of a percentage point. Bank Rate is 4 per cent, up a quarter point, and the inflation projection was revised up. The published vote was 8–1 for that specific rise. Andrew Bailey, Sarah Breeden, Swati Dhingra, Megan Greene, Clare Lombardelli, Huw Pill, Dave Ramsden and Alan Taylor supported it. Catherine Mann voted against the proposition because she wanted 4.25 per cent. All nine members favoured a rise. They did not agree on the size. The meeting ended on 4 November and the decision was published the next day, the Monetary Policy Summary and Minutes record.

The Office for National Statistics reported that the Consumer Prices Index rose by 3.5 per cent in the 12 months to September 2026, up from 3.1 per cent in August. September was the latest reading available for the decision. The Government’s target is 2 per cent. The ONS said transport, particularly motor fuel, was the largest upward contributor to the change in the annual rate.

The Bank’s November Monetary Policy Report projects consumer price inflation averaging 4.9 per cent in the second quarter of 2027. That figure is a projection, not a reading. It depends on assumptions about energy prices and the path of interest rates. The November minutes put the projection for the first quarter of 2027 at around 4.5 per cent, approximately 1.25 percentage points above the July report’s projection for that same quarter. That is the like-for-like revision. The July report expected inflation to rise to 3.2 per cent around the turn of 2026–27 before falling. The November report expects a peak of about 5 per cent in the middle of 2027. Those are projections for different points in time. Their difference is not a revision for one quarter. Label every future figure a projection.

The Monetary Policy Committee’s stated reason was inflation pressure in the pipeline from the scale and duration of higher energy prices, alongside activity that had generally been stronger than expected. The minutes say conflict overseas remained the main uncertainty for the inflation outlook. The committee says monetary policy cannot determine global energy prices. Its concern is whether the shock feeds into other prices and wages and makes inflation more persistent. The summary also says there was limited evidence so far of those knock-on effects. The Bank’s report says fixed-price energy contracts and hedging may have delayed the effect on some firms, and that costs could spread more widely as those arrangements expire. The committee judged that the prospective risk justified tightening now. That case rests partly on a risk not yet seen in the data.

The committee did not have a single view on spare capacity, how restrictive policy already was, or the strength of the earlier fall in underlying inflation. Mann argued that a larger rise was needed to prevent persistent price- and wage-setting behaviour becoming embedded. Dhingra said broad-based price pressures remained subdued and that the evidence did not yet distinguish delayed pass-through from weaker pass-through. She supported the quarter-point rise as insurance against upside risks. The central projection assumes a significant decline in energy prices. Bailey noted that this requires progress towards resolving the Middle East conflict. Mann warned that similar earlier energy futures curves had not materialised. The report also sets out alternative scenarios, including weaker demand and a more adverse inflation outcome. These are conditional possibilities, not confirmed readings.

Policy is not on a pre-set path. The committee says it will assess pay, pricing and spare capacity at each meeting. Bailey said a further increase could be warranted if there is no news that reduces inflation risks. That is his stated view, not a commitment by the committee. The Bank lists the next decision for 17 December 2026.

What this means if you are a director

The urgent question is not the projection. It is what your own lender can charge you this week on a floating-rate facility, an overdraft, or a loan sitting behind a personal guarantee (a promise that you, not only the company, will pay if the company does not). A Bank Rate rise does not mean every borrowing rate rises by the same amount, or on the same day. The Bank’s explainer, What are interest rates?, says changes in Bank Rate can influence the interest people and businesses are charged, but it does not set those rates. Lenders usually increase loan charges when Bank Rate rises. That is a general statement. It does not establish an identical or immediate increase for any particular borrower. A loan that contractually tracks Bank Rate will generally follow the specified change, subject to its terms. A standard variable rate is set by the lender. An existing fixed-rate loan normally stays at its agreed rate until the fixed period ends. The price of a new fixed deal can move with market expectations and the lender’s own pricing. The November report says quoted mortgage rates had already risen as market reference rates increased, and that changes feed through gradually as fixed-rate borrowers refinance. Business overdrafts and director facilities are not mortgages. Read the contract you signed.

Who gets paid, and who decides, is not the same question as who is right about inflation. The Bank decides Bank Rate. Your lender decides, within the contract, what it charges you and when. If the facility tracks Bank Rate in full, the lender receives more interest on that balance where the contract passes the increase through. Whether the lender’s margin rises is a separate question the published decision does not answer. Funding costs and the lender’s own pricing determine that. Savers may receive more if their provider passes the increase on. That is not automatic either. The official account tells you the committee tightened because of a risk that energy costs spread into wages and other prices. It also records that evidence of that spread is limited so far, and that the central projection assumes energy prices fall. What it leaves out is the number that matters at your kitchen table: how much of this quarter point your lender will add to your facility, and on which date.

A rate rise alone does not call a personal guarantee. A guarantee is typically triggered by a default or a demand under its own terms, not by the Bank moving Bank Rate. Higher interest can still matter. If the extra cost pushes the company towards a missed payment, the exposure on the guarantee, and on an overdrawn director’s loan account (money you have taken from the company that has not been repaid or taxed as salary or dividend), gets closer. Wrongful trading (carrying on when you knew, or ought to have known, there was no reasonable prospect of avoiding insolvent liquidation or administration, without taking every step to minimise loss to creditors) and disqualification are later questions. They are not created by a quarter-point rise. They become live if you ignore a cash shortfall and keep trading as if nothing has changed. Formal insolvency — a creditors’ voluntary liquidation (CVL), a company voluntary arrangement (CVA), or administration — is sometimes the right choice. It is a choice. It is not the sentence that follows a letter from the bank.

The first person who rings after a rate rise is often someone who is paid if you enter a formal procedure. An insolvency practitioner instructed to advise the company on a CVL is paid from the estate. A lead-generation site that funnels you to one firm is paid for the introduction. Neither of those payments requires your facility to be in default today. An accountant who already knows the loan documents, and a solicitor who is not selling a procedure, can tell you what the contract actually says before anyone recommends a process.

HMRC is a creditor with a timetable, not a party to this rate decision. If the extra interest means you will miss a VAT or PAYE payment, time to pay is a structured arrangement with HMRC, agreed in advance, not a hope that enforcement will wait. A winding-up petition is a court process with its own notice periods. It is not the automatic next letter after a Bank Rate rise. If you are already in a time-to-pay arrangement, a higher overdraft interest bill can break the cash figure you gave HMRC. That is a reason to reopen the numbers this week, not a reason to stop paying and wait.

As an illustration only, if the rate on an unchanged £100,000 interest-only balance rose by the full 0.25 percentage points, interest would cost £250 more a year, or about £20.83 a month, before fees and tax. That is arithmetic: 0.25 per cent of £100,000 is £250. It is not a lender quote. A repayment loan, a changing balance, an overdraft charged daily, or a facility that moves by less than the full quarter point produces a different cash figure. The Bank’s explainer is the source for the caveat that matters here: Bank Rate is not the rate on your loan. Your agreement is.

Scotland and Northern Ireland have different insolvency procedures and court rules. The Bank Rate decision itself is UK-wide. The documents that govern your facility, your guarantee and any enforcement are not.