ACCA Warns Further Rate Rise Could Follow as Bank of England Lifts Interest Rates to 4%
The Bank of England has increased interest rates to 4%, with ACCA’s Chief Economist warning that a further rise could follow in early 2027 if inflationary pressures persist.
The Bank’s Monetary Policy Committee increased Bank Rate from 3.75% to 4% on 5 November 2026, as policymakers continue to respond to inflation running above the Bank’s 2% target.
The decision marks the first increase in UK interest rates since 2023 and comes against a backdrop of renewed pressure on energy prices, continued geopolitical uncertainty and an economy that has proved more resilient than expected.
Jonathan Ashworth, Chief Economist at ACCA, said:
“The Bank of England raised interest rates by a quarter of a percentage point to 4% at today’s meeting – the first rate hike since 2023. UK growth has proved surprisingly resilient – despite headwinds from the Middle East conflict, while inflation looks set to move above 4% over coming months.
“Against such a backdrop, it seemed highly likely the committee would opt to tighten policy to try and reduce the risks of persistent above-target inflation.
“In the absence of a resolution of the Middle East conflict, the risk is for another rate increase in the first quarter of next year.”
The decision will be closely watched by businesses across Yorkshire, particularly those managing borrowing, investment and growth plans.
Higher interest rates can increase the cost of business loans and other forms of finance, while also influencing consumer spending and wider confidence.
At its previous meeting in September, the Bank held rates at 3.75% but warned that rising energy prices linked to the Middle East conflict were creating greater upside risks to inflation. Three members of the Monetary Policy Committee had already voted for an increase to 4% at that meeting.
The Bank currently reports UK inflation at 3.5%, compared with its 2% target.
Attention will now turn to the Bank’s final interest rate decision of 2026, scheduled for 17 December, and whether further tightening will be required in the new year.
About Jonathan Ashworth
Jonathan Ashworth is Chief Economist at ACCA Global. He previously worked as an economist at HM Treasury and has held senior global economist roles at Morgan Stanley and Barclays Wealth.
About ACCA
ACCA, the Association of Chartered Certified Accountants, is a global professional accountancy body supporting more than 266,000 members and 545,000 future members across 179 countries.
The organisation provides professional qualifications, continuous learning and insight to the accountancy profession, while working with policymakers, standard setters and other professional bodies internationally.
