--- title: "UK Interest Rate Predictions: Markets Put a December Rise at Even Odds After the Move to 4%" description: Markets see a 50% chance of another Bank of England rise on 17th December. Next rate dates, economist forecasts and what it means for mortgages. author: Dr Marina Nani (Editor-in-Chief) date: 2026-11-06T12:00:00.190Z updated: 2026-11-06T12:00:00.214Z canonical: https://www.richmanmagazine.com/article/uk-interest-rate-predictions-bank-of-england-december image: https://cdn.nanimediahouse.com/unsplash-ewgvnknjfei.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 on Thursday 5th November, the Bank of England lifted Bank Rate from 3.75% to 4%. By the evening, money markets had moved on to the next decision. Traders now put the chance of another quarter-point rise on Thursday 17th December at about 50%, up from roughly 30% before the announcement, Reuters reported. If you have a mortgage to renew, savings to place or a business loan to price, the path from here matters more than Thursday's move. ## Bank of England Rate Decision Dates The Monetary Policy Committee announces its next decisions on these dates: - Thursday 17th December 2026 - Thursday 4th February 2027, with a new Monetary Policy Report - Thursday 18th March 2027 - Thursday 29th April 2027, with a new Monetary Policy Report The February meeting brings the Bank's next full set of forecasts, and Standard Chartered has already pencilled in a rise for it. ## What Money Markets Price for 2027 Money markets price about 0.76 percentage points of further rises by the end of 2027, up from about 0.67 points before Thursday's decision. That is roughly three more quarter-point increases, which would take Bank Rate to about 4.75%. Most economists expect less. Governor Andrew Bailey explained the gap at his press conference: markets are pricing the risk of a sharp further jump in energy prices, while economists forecast the single most likely path. David Rees, chief economist at Schroders, said: 'This is not the start of an aggressive tightening campaign.' Before the decision, a Reuters poll had found 30 of 61 economists expecting another rise in the first three months of 2027. ## Economist Forecasts for the Next Rise Standard Chartered changed its forecast after Thursday's decision and now expects one more quarter-point rise in February, Reuters reported. It also sees a risk of an earlier move in December if the Middle East conflict escalates and energy prices climb. It expects the Bank to start cutting in the final quarter of 2027, followed by three more cuts in the first three quarters of 2028. Michael Metcalfe, head of macro strategy at State Street, expects at least one more rise and said the open question is how many. James Smith of ING said a December rise cannot be ruled out if the crisis in the Middle East escalates again. Alexandros Xenofontos, lead UK economist at TS Lombard, called Thursday's decision far more hawkish than expected. ## Monetary Policy Committee Split The nine rate-setters agreed that rates had to rise on Thursday and disagree on what comes next. Catherine Mann voted for 4.25%. 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 spreading into wider prices before they back another rise. Bailey sits between the two groups. He said the fall in oil prices in the 48 hours before the decision was encouraging, but that a large amount of inflation pressure is already in the pipeline. ## Oil Prices and the Inflation Forecast The Bank's central forecast has inflation peaking at an average of 4.8% in the second quarter of 2027 and returning to 2% only in the third quarter of 2028. In its adverse case, with oil near $130 a barrel against about $100 now, inflation reaches 6.2% in the third quarter of 2027. Bailey named events in the Middle East as the main factor in the committee's next decisions, so the oil price between now and 17th December is the figure to watch. ## Fixed Mortgage Rates and Gilt Yields Fixed mortgage rates follow swap rates and gilt yields, not Bank Rate itself. On Thursday the two-year gilt yield, the one most sensitive to rate expectations, rose to 4.79%, and the ten-year yield rose to 5.17%. Lenders reprice fixed deals as those yields move, so any December rise that markets price in shows up in fixed deals before the committee votes. If you are on a tracker, each quarter-point rise passes straight through. UK Finance figures reported by the BBC put Thursday's rise at about £31 a month for 510,000 tracker borrowers. For what Thursday's decision and the Wall Street sell-off mean for your ISA and pension, read [our analysis of the rate rise and the tech sell-off](https://www.richmanmagazine.com/article/bank-of-england-rate-rise-nasdaq-correction-isa-pension). **At a glance** - Bank Rate: 4%, up from 3.75% - Next decision: Thursday 17th December 2026 - Market chance of a December rise: about 50% - Further rises priced by the end of 2027: about 0.76 percentage points - Standard Chartered forecast: one more rise in February 2027 - Inflation peak forecast: 4.8% in the second quarter of 2027