At noon in London today, the Bank of England is expected to do something it has not done in more than three years: raise interest rates. Markets put the chance of a quarter-point rise to 4% at roughly 97%, and a Reuters poll of economists agrees. It would be the first increase since August 2023.

The decision matters beyond Britain. The Bank would become the latest major central bank to turn back toward tightening in 2026, after the Federal Reserve, the Bank of Japan and the European Central Bank all moved the same way. For households, it would feed into tracker mortgages within weeks; for markets, the questions are how the nine-member MPC splits and how much further rates may go.

What happens at noon

The Bank publishes its decision, the minutes and the quarterly Monetary Policy Report at 12:00 noon London time; the vote split is the first thing traders will read. At the last meeting on September 17, the committee voted 6-3 to hold at 3.75%, with Greene, Mann and chief economist Pill already voting for an immediate rise to 4%.

Forecasts for today’s split differ. A Reuters poll points to a 7-2 vote in favour of a hike, implying at least one of September’s holders has switched sides; Deutsche Bank expects a narrower 6-3. Governor Andrew Bailey’s ballot will be watched closely — he cast the deciding vote for the last cut in December 2025, when the committee split 5-4.

The Monetary Policy Report carries the second signal: in September, the Bank’s staff projected inflation at around 3.75% in late 2026 and slightly above 4% in early 2027. Whether the new forecasts lift that peak, or bring forward the return to the 2% target, will shape expectations for December and beyond.

The inflation numbers behind the decision

The case for a hike hardened on October 21, when the ONS put September CPI at 3.5%, up from 3.1% in August — the highest since October 2025 and above the 3.4% expected. The next inflation release is not due until November 18, so today’s decision is being taken on this data.

Source: Office for National Statistics, Consumer price inflation, UK: September 2026, published 21 October 2026.

The details matter as much as the headline. Motor fuel prices made the largest upward contribution, rising 29.8% over the year — petrol up 8.2p a litre in a single month to 169.5p, diesel up 10.7p to 192.5p. But the rise was not only about fuel: core inflation rose to 2.8%, and services inflation — the Bank’s key gauge of persistent domestic pressure — climbed to 3.7%. At 3.5%, headline inflation sits 1.5 percentage points above the Bank’s 2% target, or 75% above it.

The backdrop is an energy shock with a geopolitical edge: Middle East tensions have pushed fuel prices higher, and the Bank warned in September that rates may need to rise if higher energy prices feed into more persistent inflation.

How certain is a hike?

Economists and markets are not quite in the same place — and that gap is itself informative.

Compiled by Macrometer; the Reuters percentage is our calculation.

Traders have priced the hike almost fully, while the economists’ poll — taken three weeks ago, before the latest inflation data — leaves more room for doubt. Pricing has firmed from around 86% in early October to roughly 97% this week; a hold now would be a genuine surprise.

The road from 5.25% to 3.75% — and back

Today’s expected move would close a chapter begun in August 2023, when the Bank last raised rates to a 5.25% peak. Six cuts followed:

Source: Bank of England Bank Rate history. The December 2025 cut was decided by a 5-4 vote.

Bank Rate has been held at 3.75% at every meeting of 2026, and September’s hold was already close-run, with a third of the committee voting to hike. Today looks less like a sudden reversal than the completion of a shift building for two months.

What it means for households

A quarter-point rise feeds fastest to the roughly 510,000 households on tracker mortgages, whose rates move with Bank Rate. Reports this week put the average extra cost at around £31 a month, with a similar effect on the 470,000 on standard variable rates. The table below is Macrometer’s own illustrative calculation of the extra annual interest from a 0.25-point rise, on an interest-only basis.

Illustrative calculation by Macrometer: 0.25% of the outstanding balance. Actual payment changes depend on the remaining term and whether the mortgage repays capital.

Fixed-rate borrowers are insulated until their deals expire, but average two- and five-year fixed rates are already close to 6%. Savers stand to gain if banks pass the rise to deposit rates.

Why the vote may not be unanimous

The sharpest objection is that the overshoot is concentrated in energy, whose prices are set in global markets: raising British rates does little to bring petrol down, and risks squeezing household budgets while the cause sits outside the Bank’s control.

The counterargument, which appears to be winning, is persistence: core and services inflation are both rising, and the September minutes warned against waiting too long for evidence of second-round effects.

What to watch next

Three things after noon will set the tone. First, the vote split: 7-2 or wider signals a committee that has made up its mind; a narrow 6-3 or 5-4 leaves December genuinely open. Second, the new inflation forecasts — whether the peak moves above 4% in early 2027, and when the Bank expects a return to 2%. Third, Governor Bailey’s language on further moves. Markets already price three to four further quarter-point rises during 2027, taking Bank Rate to between 4.75% and 5%.

The next meeting is on December 17. The Federal Reserve, which held rates on October 28, faces its own December decision, with a hike also in view as US inflation runs hot.

For now, the market’s verdict is nearly unanimous. By this evening, London time, we will know by how much the committee agreed.

This article is for information only and is not financial advice. The Bank of England’s decision had not been announced at the time of publication; expectations cited are market pricing and survey data, not the outcome.