{
  "id": 18355103,
  "title": "BoE recap: A divided hike and a warning that the energy shock is not over",
  "url": "https://urgent.news/2026/11/05/boe-recap-a-divided-hike-and-a-warning-that-the-energy-shock-is-not",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-11-05T17:12:46.000Z",
  "source": {
    "name": "FXStreet",
    "slug": "fxstreet",
    "url": "https://www.fxstreet.com/news/boe-recap-a-divided-hike-and-a-warning-that-the-energy-shock-is-not-over-202611051712"
  },
  "original_language": "en",
  "account": "The Bank of England (BoE) recently increased its Bank Rate by 25 basis points to 4.00%, with eight policymakers supporting the move and one, Catherine Mann, advocating for a larger 50-basis-point increase. The decision was made as the central bank sharply raised its inflation forecasts and warned that energy pressures could necessitate further tightening measures. The BoE now expects inflation to peak at approximately 5% in the second quarter of 2027, up from its earlier prediction of 3.2% in late 2026. The Consumer Price Index (CPI) is unlikely to return to the 2% target until the third quarter of 2028. In the worst-case scenario, inflation could escalate to 6.2% if the energy shock worsens. Governor Andrew Bailey stated that there was already sufficient inflationary pressure to warrant the rate hike, but cautioned that this may not be the last increase. The Middle East crisis could also persist. However, Bailey emphasized that this should not be interpreted as the start of a series of consecutive rate hikes. The Bank still perceives limited evidence of second-round effects, but stronger-than-expected economic activity has bolstered the case for tighter policy. The economic outlook is uncertain: the BoE has lifted its growth predictions for the near term, now anticipating GDP to expand by 1.6% in 2026, though growth is expected to slow to 1.3% in 2027 and 1.2% in 2028. Unemployment is projected to rise gradually, while pay growth is now expected to exceed previous estimates. The government's budget is anticipated to briefly mitigate inflation, but this effect is likely to be reversed later. The BoE's message was generally hawkish but not a pledge to continue the tightening cycle. Members of the Monetary Policy Committee (MPC) Lombardelli and Pill believe there is a case for another rate increase in the near future, while economist Greene suggested that further hikes may be necessary. Governor Bailey stated that the existing policy was sufficiently restrictive and that part of the increase in market-rate expectations was due to risk premia rather than the Bank's predicted course. The MPC has increased rates to guard against a more severe inflation outcome, but has deliberately kept its next move open.",
  "summary": "The Bank of England (BoE) raised its Bank Rate by 25 basis points to 4.00%, with eight policymakers backing the move and Catherine Mann preferring a larger 50-basis-point increase.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}