--- title: A Rate Rise and a $3 Trillion Wall Street Sell-Off Hit British Savers on the Same Thursday description: The Bank of England raised rates to 4% as US tech stocks fell into a correction. What it means for your global fund, pension, ISA and mortgage. author: Dr Marina Nani (Editor-in-Chief) date: 2026-11-06T09:00:00.036Z updated: 2026-11-06T09:00:00.042Z canonical: https://www.richmanmagazine.com/article/bank-of-england-rate-rise-nasdaq-correction-isa-pension image: https://cdn.nanimediahouse.com/unsplash-fag-pbmbybs.webp categories: Money, Business content_type: Analysis region: United Kingdom publication: Rich Man Magazine schema_type: Article about: - type: Organization name: Bank of England description: The Bank of England is the central bank of the United Kingdom. Its Monetary Policy Committee sets Bank Rate, and it regulates banks and building societies through the Prudential Regulation Authority. url: https://www.bankofengland.co.uk sameAs: - https://en.wikipedia.org/wiki/Bank_of_England --- At noon in London on Thursday 5th November, the Bank of England raised interest rates for the first time since August 2023. By the close in New York, the Nasdaq had suffered its worst day since the tariff rout of April 2025, dragged down by the chipmakers that have carried the AI boom. If you own a global index fund, a workplace pension or a stocks and shares ISA, you were exposed to both. ## Bank of England Base Rate Rise The Monetary Policy Committee voted 8-1 to lift Bank Rate from 3.75% to 4%. The one dissenter, Catherine Mann, wanted a bigger rise to 4.25%. Nobody on the committee voted to hold. Governor Andrew Bailey said the rise 'should not be seen as the first in an inevitable long sequence of hikes'. He also made clear that another increase is likely unless the conflict in the Middle East is resolved. The Bank's new forecasts show the scale of its worry. It expects inflation to peak at an average of 4.8% in the second quarter of 2027, more than double its 2% target, and not to return to target until the third quarter of 2028. If oil climbs to around $130 a barrel from roughly $100 now, the Bank's adverse scenario puts inflation at 6.2% in the third quarter of 2027. The Bank also expects household income from work, after inflation and tax, to fall this year and next. ## Nasdaq Correction and the AI Chip Sell-Off In New York the selling started with the chipmakers. Nvidia fell more than 9% and the Philadelphia semiconductor index, which tracks the biggest chip companies, dropped more than 12%, Reuters reported. The Nasdaq Composite closed more than 5% lower, and the S&P 500 lost more than 4%, wiping about $3 trillion off the value of its companies. All three main US indexes had their biggest one-day fall in 19 months. Is the stock market crashing? By the usual definitions, it is not. A correction is a fall of 10% from a peak, and the Nasdaq Composite closed more than 10% below its record of 6th October, which confirms one. A bear market starts at a fall of 20%. The trigger was the US midterm elections. The Democrats won control of Congress on Tuesday, including in several states where AI data centres are being built, and investors moved to price in slower construction and tougher rules for the AI industry. Wednesday had brought a relief rally, the best day for the S&P 500 in three months, and Thursday took it back. Qualcomm fell 9.5% after a weak forecast for smartphone chip sales, and Tesla and SpaceX both dropped. Rich Man covered the voter backlash against data centres on Thursday in [our report on the 45% of planned US capacity now at risk](https://www.richmanmagazine.com/article/data-center-moratorium-midterms-ai). ## US Tech Inside a UK Global Fund Most British savers never buy an American share directly, yet many own a large slice of the Nasdaq. A global tracker that follows the MSCI World index puts about 72% of your money in US companies, according to MSCI's own factsheet for the end of July. Technology made up almost 29% of the index, and Nvidia, Apple and Microsoft alone accounted for close to 14%. That concentration has driven global fund returns for years. On a day like Thursday it works in reverse, and a fund sold as a spread across 23 countries moves largely with a handful of American chip and software companies. London felt it within hours. The FTSE 100 had climbed as high as 10,948 in the morning, close to a record, and closed 0.4% lower at 10,782.66 once Wall Street opened. The London-listed technology trusts took the heaviest losses: Allianz Technology Trust fell 7.1%, Polar Capital Technology Trust 6.6% and Scottish Mortgage Investment Trust 4.8%. Sterling also strengthened against the dollar after the Bank's decision, Reuters reported, and a stronger pound trims the sterling value of every dollar asset you hold, on top of any fall in the share price. Open the factsheet for your own pension or ISA fund and look at two numbers: the US weighting and the top ten holdings. If the US share is above 70% and you expected a spread around the world, you now see where your risk sits. ## Interest Rate Predictions for the UK Financial markets now price in three more quarter-point rises during 2027, more than most economists expect. Bailey said the gap reflects markets pricing the risk of a sharp further jump in energy prices, while economists forecast the single most likely path. Two-year gilt yields, which move with expectations for Bank Rate, rose 5 basis points after the decision. The committee is split on what comes next. Deputy Governor Clare Lombardelli said a further rise is likely in the near term, and Megan Greene and chief economist Huw Pill both spoke of more tightening. Swati Dhingra and Alan Taylor said they need stronger evidence that energy costs are feeding into wider prices before they back another rise. The Bank upgraded its growth forecasts to 1.6% this year and 1.3% next, and it credited part of that strength to spending on artificial intelligence. That is the same AI spending investors punished on Wall Street on Thursday. ## Tracker Mortgages, Fixed Rates and Savings If you hold a tracker mortgage, your rate rises with Bank Rate, usually from your next payment. UK Finance figures reported by the BBC show 510,000 tracker borrowers facing an increase of about £31 a month. If you are on a fixed deal, nothing changes until it ends. Our [rate rise preview](https://www.richmanmagazine.com/article/bank-of-england-rate-rise-november-2026-mortgage) explains how new fixed rates had already priced in Thursday's decision. If you hold cash, check what your bank pays this month. Inflation was 3.5% in September and the Bank expects it to rise further, so any savings account paying less than that is losing you money in real terms. ## US Jobs Data and the Federal Reserve The US jobs report for October is due on Friday 6th November. Traders expect the Federal Reserve to raise rates again in December after its September rise, and two regional Fed presidents, Beth Hammack of Cleveland and Thomas Barkin of Richmond, hinted at further increases on Thursday. A strong jobs number would strengthen the case for a December rise in Washington. **At a glance** - Bank Rate: 4%, up from 3.75%, the first rise since August 2023 - Vote: 8-1, with one vote for 4.25% - Inflation peak forecast: 4.8% in the second quarter of 2027 - Nasdaq Composite: in correction, more than 10% below its 6th October record - S&P 500: about $3 trillion lost in one day - Tracker borrowers: about £31 a month more - US share of the MSCI World index: about 72%