The first rise in over three years…
Summary:
“At its meeting ending on 4 November 2026, the Monetary Policy Committee (MPC) voted by a majority of 8–1 to increase Bank Rate by 0.25 percentage points, to 4%. One member voted to increase Bank Rate by 0.5 percentage points, to 4.25%.
The conflict in the Middle East is now in its ninth month. Global energy prices have continued to rise from an already elevated level. UK CPI inflation increased to 3.5% in September. It is now expected to rise to around 5% by the middle of next year. It is then projected to fall as the impact of rising energy prices on 12-month inflation rates fades, and still restrictive monetary policy bears down on inflation.
While the direct effects of higher energy prices are clear, and will continue to feed into firm and household energy bills, there remains limited evidence of knock-on effects on other prices and wages. However, the degree of inflationary pressure in the pipeline is now sufficient to warrant an increase in Bank Rate. Activity data in recent months have generally been stronger than expected, adding to the case for modestly tighter monetary policy.
Monetary policy is not on a pre-set path. The Committee will continue to assess the evidence at each meeting, in particular how likely high energy prices are to feed through to other prices and the economy more broadly, by monitoring the evolution of underlying pay, pricing behaviour, and slack. The Committee will adjust Bank Rate as necessary to ensure CPI inflation returns to the 2% target in the medium term.”
Bank of England governor Andrew Bailey has criticised the push to regulate AI, proposing more testing instead. He wrote in a Substack article:
“in the excitement surrounding AI development, there is a risk that we move too quickly to debates about regulatory architecture before establishing where the failure exists.
Once that has been established, attention can turn to the practical challenge. How do we make sure that intervention is possible and effective? A sensible starting point is rigorous model testing, conducted before and after deployment. Such testing is essential if we are to understand the behaviour of increasingly complex systems, identify vulnerabilities and establish confidence in the safeguards that are intended to contain them. It should also form an important part of appropriate standards for deploying these models.”
Bailey said progress should accelerate. Burnham, meanwhile wants the UK to take on a position of chief global AI regulator. He said in his speech yesterday:
“As Gordon Brown has said, we can be the world’s innovation nation, and he’s right, we can.
A nation trusted by others to be a global leader in AI, an honest broker
When Britain takes the Presidency of the G20 next year, I will show our new-found confidence as a country, and I will show it to the world by putting AI centre stage and Britain will then work to develop a new global code to capture its benefits whilst being clear-eyed about its risks.
Just as Gordon did in the financial crisis in 2008, so Britain will do it again, step forward, and bring people together around what’s right for the future.”
Bailey added: “regulation is not, in my view, the right place to start.” Ouch…
The Monetary Policy Committee of the Bank of England has voted 6-3 to hold interest rates at 3.75% for the sixth time. Full remarks here…
The Bank of England also announced it would cease its programme of quantitative tightening. Happy news for gilt traders and the Chancellor…
Trades Union Congress boss Paul Nowak has been appointed by John Healey as a non-executive director on the Bank of England’s Court of Directors. Which functions as the bank’s board…
Nowak will contribute to the BoE’s “strategy, governance, budget and risk framework, and for ensuring the effective discharge of the Bank’s statutory functions.” The government said:
“Paul Nowak is General Secretary of the Trades Union Congress. The TUC represents 47 unions and 5.3 million workers in the UK. Paul has represented the TUC internationally at the International Labour Organisation, OECD and G20, and holds non-executive experience at Unity Trust Bank.”
Frances O’Grady was the last trade union baron to be in this position. The government’s press release says Nowak has “confirmed that they have not engaged in any party political activity in the last five years.” Roughly £30 million has been donated by trade unions to Labour centrally since 2021 and Nowak has spent the last four days loudly campaigning against Reform’s donations…
Bank of England staff have been told their ‘Wellbeing Centre’ will close if they don’t learn how to use the loos properly. Welcome to silly season…
An email went round to staff today:
“Dear Member,
We have had two incidents this week of faeces found on the floor of the showers and toilets in the Wellbeing Centre Gents changing rooms. This is unacceptable and will not be tolerated.
Should this continue, we will be forced to temporarily suspend some services/facilities.
Kind regards
[REDACTED]
Bank of England Wellbeing Centre”
The Bank is also under fire this week after the Telegraph reported that 1,040 employees were allowed to work from abroad and they spent more than 12 days doing so last year. It’s no fun working from the beach – sand gets in your laptop – unless of course they aren’t working at all…
The taxpayer is of course funding this gym, internal occupational health, and fitness facility located in the basement vaults of the Bank of Threadneedle Street. Callum McGoldrick, Investigations Campaign Manager at the TaxPayers’ Alliance, said:
“Bank of England staff should be focused on sorting out the economy, not making a complete mess of their own changing rooms. Bosses need to clean up their act… literally.”
When they said the institution was a busted flush…
The Monetary Policy Committee of the Bank of England has voted to hold interest rates at 3.75% for the fifth time. It voted by a majority of 6–3 (hawkish) to maintain the rate against a hike. Inflation fell by more than expected. Read the full remarks here…
Mail commentator Dan Hodges – who was kind to Burnham during the Makerfield campaign – now concludes: “The truth is Andy Burnham doesn’t have a 10 year plan. He’s barely got a 10 week plan.“