Responding to today’s interest rate decision by the Bank of England’s Monetary Policy Committee (Thursday 5 November 2026), Suren Thiru, ICAEW Chief Economist, said:
“Raising interest rates is policymakers' precautionary attempt to put the lid back on inflation following the Iran conflict-induced energy shock, but households and businesses will feel the pinch immediately through higher borrowing costs and tighter finances.
“This rate rise signals a sizable shift in direction. The strong backing for this decision and the tone of the minutes suggest further increases are probable, even if most rate-setters are in no hurry to tighten policy aggressively.
“The path for interest rates is hanging in the balance, with US-Iran hostilities holding the key. Unless energy prices start to retreat, further rate hikes will move from a risk to a real prospect.
“With the Bank forecasting inflation to climb further in the months ahead, policymakers are likely to remain on high alert to mounting price pressures, leaving a February rate rise looking increasingly likely."
ENDS
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