Rising Inflation and Your Mortgage: Will the Bank of England Raise Rates in November 2026?

Key Takeaways

What happened to UK inflation in September 2026?

UK inflation rose to 3.5% in the year to September 2026, up from 3.1% in August, according to the Office for National Statistics (ONS). This came in higher than the 3.4% economists had anticipated, marking the sharpest annual increase in nearly a year.

Source: Office for National Statistics, September 2026 figures.

Fuel was the primary catalyst. Petrol hit an average of 169.5p per litre while diesel rose to 192.5p in September the highest figures recorded since 2022. Prices have climbed steadily following global oil supply disruptions linked to the conflict in Iran that began in February.

On a lighter note, food prices dropped slightly month-on-month, offering a small buffer against even higher headline figures.

Why does inflation matter for the Bank of England base rate?

The Bank of England is tasked with keeping inflation at 2%. Its chief mechanism for slowing price growth is Bank Rate (the base rate), which dictates borrowing costs across the UK economy.

When inflation pushes past the target, the Monetary Policy Committee often raises Bank Rate to cool consumer demand. Conversely, when inflation slows, rate cuts become more likely.

The Bank pays particularly close attention to services inflation as an indicator of underlying domestic price pressure. In September, services inflation rose from 3.4% to 3.7% another figure that came in higher than expected.

Will the Bank of England raise interest rates on 5 November?

Bank Rate currently sits at 3.75%. When the MPC meets on 5 November 2026, many economists expect them to vote for a quarter-point increase, taking the rate to 4.00%.

Arguments for a rate hike

• Above-target figures: Both headline (3.5%) and services inflation (3.7%) surprised to the upside.
• Persistent energy pressure: Brent crude oil traded at $110.96 a barrel on 21 October, keeping fuel costs elevated.
• Medium-term forecasts: Inflation is projected to pass 4% next year double the Bank’s target.
• Wage and labor dynamics: Roger Lee at investment bank Cavendish noted that strong wage growth and a resilient job market “materially increase the likelihood of an ‘insurance’ rate rise in November.”

Arguments against a hike

Not everyone agrees a hike is inevitable. James Smith, an economist at ING, pointed out that there is “still zero sign that the UK’s inflation shock is broadening out beyond energy” and noted that secondary inflationary effects remain limited.

While a move to 4% looks likely, the final decision rests on how the Bank interprets the complete economic picture on the day.

How could the Budget on 28 October affect mortgage rates?

Chancellor John Healey presents his first Budget on 28 October 2026 against a challenging fiscal backdrop. Government borrowing hit £24.5bn in September-£1.9bn higher than forecast by the Office for Budget Responsibility-pushing total UK national debt beyond £3tn for the first time.

This matters directly to homeowners because fixed-rate mortgages aren’t priced straight off Bank Rate. They track swap rates, which reflect the cost of government borrowing (gilt yields).

As PwC noted recently, gilt yields directly dictate how lenders price their fixed terms. A Budget that reassures financial markets can help stabilize or lower swap rates, whereas one that creates uncertainty can push funding costs higher. On 21 October, the 10-year UK gilt yield stood at 5.4%.

What could a rate rise mean for you?

The impact of any rate adjustment depends entirely on your current mortgage arrangements.

Tracker and variable rate borrowers

Tracker deals follow Bank Rate directly, meaning a 0.25% increase will raise your monthly payment almost immediately. Standard Variable Rates (SVRs) are set by individual lenders, though most tend to pass on central rate hikes.

If you are weighing up your options, our guide to fixed vs tracker mortgages outlines how both setups compare.

Fixed-rate deals expiring in the next six months

If your current deal ends before May 2027, you don’t need to sit on your hands. Most lenders allow you to reserve a new rate up to six months before your term finishes.

At WIS Mortgages, we regularly advise clients to treat early booking as a safety net: you secure today’s rate as a shield against market rises, but if pricing improves before your start date, you can switch to a lower deal without penalty. If you are approaching the end of your term, read our guide on what to do when your fixed rate is ending.

First-time buyers

Higher rates continue to restrict borrowing capacity. PwC reports that mortgage rates remaining near three-year highs are squeezing overall buyer affordability.

The government’s Your First Home initiative offering a 2.5% deposit structure on new builds alongside a 20% equity loan may offer relief, with further details expected in the Budget. Analysis by Tembo suggests the scheme could shorten deposit accumulation times from 34 months down to 18 months, though lower earners in three-quarters of English cities will still need income multiples above 4.5x.

Fixed-rate borrowers with time remaining

If you are mid-way through a fixed deal, your monthly payments will remain unchanged regardless of what the Bank decides on 5 November. However, noting your exact end date now ensures you can plan your next step early.

What is happening in the UK housing market?

The broader housing market is currently taking a cautious approach. ONS data shows average UK house prices grew 0.9% to £273,000 in the year to August 2026 (down from 1.2% in July), while London prices contracted by 2.2%. Private rents increased by 3.8% to an average of £1,406 per month.

PwC describes buyer activity as being in a “wait-and-see mode” ahead of the fiscal announcement, with mortgage approvals hovering at their lowest levels since 2023.

How WIS Mortgages can help

Whether rates move or stay put on 5 November, reviewing your mortgage options early gives you clarity and control. Our team can review your existing arrangement, compare market-wide products, and build a strategy tailored to your goals whether you are remortgaging, moving home, or buying for the first time.

Speak to a Mortgage Specialist or call us directly on 020 3011 1986.

Frequently asked questions

What is the Bank of England base rate right now?

As of 22 October 2026, the Bank Rate sits at 3.75%.

When is the next Bank of England interest rate decision?

The Monetary Policy Committee announces its next decision on 5 November 2026.

Should I fix my mortgage now or wait?

A fixed rate provides payment certainty, whereas a tracker moves in tandem with Bank Rate. The right choice depends on your budget flexibility and risk appetite.

Can I secure a new mortgage rate before my current deal ends?

Yes. Most lenders allow you to secure a product up to six months ahead of your expiry date, keeping your options open if rates fluctuate in the interim.

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Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

This article is for general information only and does not constitute financial advice. Mortgage availability and rates are subject to lender criteria and may change. Please speak to a qualified mortgage adviser before making any decisions.

WIS Mortgages and Protection Services is a trading name of WIS Contractor Mortgages Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). Our Financial Services Register number is 824411. We are a credit broker, not a lender.