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Thu, 05 Nov 2026

Thu, 05 Nov 2026 Faisal Islam: How high will interest rates go?

The BBC's economics editor views one more interest rate as likely, but thinks that will be all.

* Interest rates have risen to 4% and the Bank of England expects one more rise in February.
* Inflation is expected to reach just under 5% next spring due to a typical household energy bill surging by 27%.
* The UK economy is performing better than expected, with growth at 0.6%, 0.5%, and heading for 0.7% between July and September.
* Unemployment has stabilised, actually falling slightly.
* The Bank of England's decision to raise interest rates is conditional on the war in Iran continuing.
* The US midterm elections may have contributed to a decrease in oil prices, which could impact inflation.
* The UK economy's better-than-expected performance and stronger currency may help rein in inflation by making imports cheaper.