Bank of England raises rates to 4% as it forecasts inflation near 5% next year

The Bank of England raised its benchmark interest rate by 25 basis points to 4% on Nov. 5 as a prolonged energy shock increased its inflation concerns. The move highlights a potential source of pressure on Bitcoin investors exposed to sterling borrowing. Bank of England decisionEight policymakers backed the increase, while Catherine Mann preferred a larger, 50-basis-point move to 4.25%. The Bank projected UK consumer-price inflation around 5% in the second quarter of 2027, following September's 3.5% reading. The median in the Bank's Market Participants Survey already expected a 4% rate in November, which limits the case for treating the announcement as a fresh market shock.The decision came despite limited evidence so far that the energy shock was spreading into broader wage and price-setting. Policymakers judged the pressure building in the economy sufficient to act, with stronger-than-expected activity adding to the case. That leaves persistence, including firms passing on costs and workers seeking higher pay, central to the next policy decisions. November minutesThe Bank of England’s tightening meets a global assetUK borrowing costs were already rising. Forward market interest r...