Bank of England raises benchmark rate to 4% amid Iran-linked inflation surge

Exam-focused facts from the 5 November 2026 current affairs briefing.

Key facts

The Bank of England (BoE) raised its benchmark interest rate by 25 basis points to 4% from 3.75%, its first hike since August 2023.
The Monetary Policy Committee voted 8-1 for the increase, with one member favouring a larger rise to 4.25%.
UK inflation reached 3.5% in September, exceeding the official 2% target, driven by tighter oil and gas supplies due to the Iran conflict and transport bottlenecks in the Strait of Hormuz.
The geopolitical disruption began after US and Israeli forces launched strikes on Iran on 28 February, reversing a downward trend in UK rates from a peak of 5.25%.
Energy prices recently fell following losses for the Republican Party in the US midterm elections, which could alter tightening paths of the BoE, the US Federal Reserve and the European Central Bank.