The Bank of England raised its benchmark interest rate to 4% on Nov. 5 as annual UK inflation climbed to 3.5% in September, extending pressure on policymakers to contain price increases.
The Monetary Policy Committee voted 8-1 for the 0.25-percentage-point increase. Committee member Catherine L Mann favored a larger rise, to 4.25%, the Bank said. The Bank had held its rate at 3.75% at its September meeting.
Separately, the European Central Bank’s daily reference series listed €1 at £0.83393 for Nov. 5, compared with £0.83460 on Nov. 4. The series does not publish an intraday time, so the figures do not show how the euro moved around the Bank of England’s announcement.
FXStreet reported EUR/GBP near 0.8331 at 7:44 a.m. ET (12:44 GMT), down 0.05% on the day. The outlet characterized trading in the currency pair after the decision as restrained.
The Office for National Statistics (ONS) said consumer prices rose 3.5% in the 12 months to September, up from 3.1% in August. The Bank expects inflation to reach about 5% by the middle of 2027.
The committee cited the conflict in the Middle East and higher global energy prices as uncertainties for the inflation outlook. It said businesses had absorbed some cost increases through lower profit margins, while prolonged energy pressures could lead companies to pass more costs on to consumers.
The committee said monetary policy was “not on a pre-set path.”
The ONS is scheduled to publish its next UK inflation report on Nov. 18. The Bank’s next rate decision is due Dec. 17.
