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World risk · Finance and markets · Global debt & markets

The Bank of England raises rates on energy inflation

The test The Bank of England raises Bank Rate above 3.75% at any decision, scheduled or not, announced between 26 Oct 2026 and 25 Oct 2027.

Not under way · Confidence: medium · Reviewed 28 Oct 2026 · Scores from 1 to 10

This page answers: What could happen, how it is scored, and who is exposed?

Using this page
  1. Read the two scores: Likelihood and Impact are kept apart.
  2. Check what is happening, each fact with its source.
  3. Use the calendar for the dates to watch.

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Likelihood
8High rising this month

Likelihood ↑ 21 Oct 2026: ONS reported that CPI inflation rose in September from August.

Impact
4Elevated steady this month
Breadth5
Depth3
Duration5
Hard to substitute4
Canada pointNot added0

Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.

Two separate scales from 1 to 10. Strature never multiplies or merges them.

What changed

Dated, newest first

  1. OBR, 28 Oct 2026 (in the Budget document): CPI inflation forecast to peak at 3.8% in Q1 2027, with 3.4% for 2027 as a whole [12]
  2. Budget 2026: electricity VAT cut extended to July 2027 (about GBP 50 off the April 2027 Ofgem cap); 5p fuel duty cut and freeze extended to 1 Jul 2027 [12]
  3. HM Treasury, 28 Oct 2026: headroom is GBP 9bn lower than in March, more than accounted for by the conflict's impact on debt interest costs [13]
  4. Bank Rate 3.75% since 18 Dec 2025; last rise 3 Aug 2023 to 5.25% [4]
  5. CPI 3.5% in September 2026 (3.1% August); core 2.8%; services 3.7%; motor fuels up 29.8% [2]
  6. Bloomberg Economics expects a 25 bp rise in November; Bailey said in Bangkok that a rise gets harder to avoid the longer the conflict lasts (paraphrase) [6]
Show 6 earlier changes
  1. Bank Rate held at 3.75% on 17 Sep 2026 by 6-3; Greene, Mann and Pill voted for 4% [1]
  2. MPC: risks to inflation tilted to the upside; stands ready to act as necessary [1]
  3. Bank projects CPI about 3.75% in Q4 2026 and slightly above 4% in Q1 2027 [1]
  4. Rabobank expects 4.00% in November, then a long hold [8]
  5. Brent US$106 and UK gas 207p a therm on 14 Sep; Ofgem cap 1,723 pounds for Oct-Dec [1]
  6. Goldman Sachs expects a 25 bp rise in November; traders priced 47 bp of rises by year end (LSEG, Reuters) [7]

Why it matters

Three of the nine members of the Bank of England's Monetary Policy Committee voted to raise Bank Rate to 4% in September. Inflation has since risen to 3.5%, and the Bank expects it above 4% early in 2027, driven by energy. Goldman Sachs, Rabobank and Bloomberg Economics expect a quarter-point rise on 5 Nov; one rise would be the Bank's first since August 2023.

Why Likelihood 8 Pushes: CPI inflation up in September and seen higher still in early 2027; three votes for a rise; Goldman Sachs, Rabobank and Bloomberg Economics expect November; eight decisions in the window.

Why Impact 4 Key price: Bank Rate; threshold case one quarter point (3.75% to 4.00%, a 6.7% move).

Where it sits

Bab el-MandebStrait of HormuzStrait of MalaccaPanama CanalSuez CanalTaiwan Strait11. The Bank of England raises rates on energy inflation: Elevated impact · likely1 · Elevated impact · likelyBab el-MandebStrait of HormuzStrait of MalaccaPanama CanalSuez CanalTaiwan StraitUNITED STATESUNITED KINGDOMJAPANNORWAYFRANCEITALYPACIFIC OCEANINDIAN OCEANMap data: Natural Earth (public domain).
Bab el-MandebStrait of HormuzStrait of MalaccaPanama CanalSuez CanalTaiwan Strait11. The Bank of England raises rates on energy inflation: Elevated impact · likelyBab el-MandebStrait of HormuzStrait of MalaccaPanama CanalTaiwan StraitUNITED STATESJAPANNORWAYFRANCEITALYINDIAN OCEANMap data: Natural Earth (public domain).

How it spreads

If

The Bank of England raises Bank Rate above 3.75% at any decision, scheduled or not, announced between 26 Oct 2026 and 25 Oct 2027.

Not under way

Channels 5 on the card

  1. CanadaNo Canadian figure sourced; effect via global rates (Strature's view).
  2. BorrowersFixed mortgages follow swaps; lenders withdrew sub-5% deals in early October.
  3. GiltsA rising Bank Rate lifts the curve.
  4. Public financesThe 28 Oct Budget met the stability rule with GBP 15bn of headroom in 2029-30, GBP 9bn less than in March [12][13]; Bank Rate feeds the cost of public debt (Strature's view).
  5. EnergyThe Bank's case rests on how long energy prices stay high.

Sectors 1

  • Banks and insurers

Countries 1

Who is exposed

Countries
United Kingdom
Sectors
Banks and insurers

Three scenarios and their signposts

  1. S1

    One and hold

    A quarter-point rise to 4% on 5 Nov, then a long hold as energy eases.

  2. S2

    A run of rises

    Inflation tops 4% in early 2027 and the Bank raises again in February or March.

  3. S3

    Waiting it out

    Oil and gas fall back and the majority keeps holding at 3.75%.

The signposts of each scenario
PathSignpost
S1The vote and guidance on 5 Nov 2026
S2January CPI above 4% before the 4 Feb 2027 decision
S3A 6-3 or wider hold on 5 Nov 2026

No probability is given for the three paths.

Dates to watch

Calendar

The dates to watch

A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.

  1. 5 Nov 2026 MPC decision with Monetary Policy Report [3] Declared · Outside event

    Remind me

  2. 17 Dec 2026 MPC decision [3] Declared · Outside event

    Remind me

  3. 4 Feb 2027 MPC decision with Monetary Policy Report [3] Declared · Outside event

    Remind me

  4. 18 Mar 2027 MPC decision [3] Declared · Outside event

    Remind me

  5. 29 Apr 2027 MPC decision with Monetary Policy Report [3] Declared · Outside event

    Remind me

  6. 17 Jun 2027 MPC decision [3] Declared · Outside event

    Remind me

  7. 29 Jul 2027 MPC decision with Monetary Policy Report [3] Declared · Outside event

    Remind me

  8. 16 Sep 2027 MPC decision; last in the window [3] Declared · Window

    Remind me

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SourceStrature world-risk card; the dates cite the sources below.
Exhibit R-3 · UNITED KINGDOM · strature.net

The other side

Savers and holders of cash earn more. A timely rise that keeps inflation expectations in check may let rates fall sooner; Goldman Sachs expects cuts from late 2027, Rabobank in 2027-28. Higher rates raise sterling interest income (Strature's view; not a recommendation).

Connected in Strature

Sources

10 sources, numbered as the text cites them

  1. Monetary Policy Summary and minutes, September 2026. Bank of England · 17 Sep 2026 · Official · confidence high · retrieved 25 Oct 2026
  2. Consumer price inflation, UK: September 2026. Office for National Statistics · 21 Oct 2026 · Official · confidence high · retrieved 25 Oct 2026
  3. Upcoming MPC dates. Bank of England · 21 Sep 2026 · Official · confidence high · retrieved 25 Oct 2026
  4. Official Bank Rate history. Bank of England · 2026 · Official · confidence high · retrieved 25 Oct 2026
  5. UK inflation can seal the deal on the BoE's November rate hike (Bloomberg). The Star · 19 Oct 2026 · News · confidence medium · retrieved 25 Oct 2026
  6. Goldman Sachs sees BoE rate hike in November amid inflation concerns (Reuters). The Standard · 14 Sep 2026 · News · confidence medium · retrieved 25 Oct 2026
  7. Bank of England November hike risk rises: Rabobank. FXStreet · 17 Sep 2026 · News · confidence medium · retrieved 25 Oct 2026
  8. UK 30-year government bond yield hits highest level since 1998 (Xinhua). The Star · 2 Sep 2026 · News · confidence medium · retrieved 25 Oct 2026
  9. Budget 2026 document. HM Treasury, GOV.UK · 28 Oct 2026 · Official · confidence high · retrieved 28 Oct 2026
  10. Budget 2026: Breathing space for today, hope for the future. HM Treasury, GOV.UK · 28 Oct 2026 · Official · confidence high · retrieved 28 Oct 2026

Reviewed 28 Oct 2026 · version 2 · last change: scores unchanged · All risks