Markets expect the Bank of England to raise rates on 5 November

What markets expect

Financial markets are pricing a quarter-point rise in Bank Rate, from 3.75% to 4.00%, at the Bank of England’s meeting on 5 November. It would be the first increase since 2023. Bank Rate has been unchanged at 3.75% since December 2025.

Expectations firmed after September inflation came in at 3.5%, above the 3.4% forecast, and after strong recent figures for jobs and economic growth.

The vote to watch

The Bank’s Monetary Policy Committee has nine members. In September, six voted to hold rates and three voted for a rise. A decision usually turns when one or two members change their minds, so the split matters as much as the outcome. A unanimous vote, or one with dissenters wanting a bigger move, would signal more rises ahead.

Where it sits in the chain

This story spans links 2 and 3. The central bank has not acted yet, but markets have already moved the expected path of interest rates. That is why the effects arrive early: lenders price fixed mortgages off expected rates, not today’s rate. The average two-year fixed mortgage rose to 5.97% in mid-October, from 5.68% a month earlier, while Bank Rate did not change at all.

It also explains why the decision itself may move markets less than people expect. If a hike is fully priced in, the surprise would be no hike.

What to watch

• The Budget on 28 October. A tighter budget cools demand, which can reduce the need for rate rises.
• The Bank’s guidance on 5 November: whether it describes the move as a one-off or the start of a series.