Bank of England Lifts Rates to 4% With Inflation at 3.5%, Raising the Stakes for Risk Assets

The Bank of England raised Bank Rate by 0.25 percentage points to 4% on November 5, according to the central bank’s own website. It had held rates at 3.75% in September. For crypto traders the move is a reminder that persistent inflation keeps rate expectations elevated, which tends to weigh on speculative assets such as Bitcoin. That link is market commentary rather than a finding from the Bank.

According to a report by Stockpil, the Monetary Policy Committee voted 8-1, with Catherine Mann dissenting in favour of a half-point rise to 4.25%. The same report said UK consumer price inflation stood at 3.5% in September and that the Bank expects it to approach 5% by the middle of next year. Those figures come from a secondary source and were not confirmed on the Bank’s page, which does not state the vote split.

Stockpil also quoted Governor Andrew Bailey as saying that without real progress toward settling the Middle East conflict, the risks to energy prices, and therefore to inflation, lie to the upside. It said he could see the case for a further increase, followed by a more conditional approach. Markets had priced in a hike of more than 99% before the decision, and traders saw roughly a one-in-four chance of another rise in December, citing LSEG data relayed by CNBC.

A claim that markets saw a 77% chance of a hike could not be verified in any source reviewed, so it is not included here.

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Sources:

• Bank of England: Interest rates and Bank Rate, our latest decision

• Stockpil: Bank of England lifts Bank Rate to 4% in first hike since 2023