Bank of England raises interest rates to 4%, the first increase for more than three years

AI desk brief

The Bank of England raised its base rate from 3.75% to 4%, its first increase since August 2023, as the Iran war lifts energy costs. UK CPI inflation reached 3.5% in September against a 2% target and is expected to rise into the new year. Brent remained above $100 a barrel for two months, although oil fell sharply after Democrats’ midterm election victories. The report says the Fed, ECB and Bank of Japan have also begun raising rates. Tightening could pressure gold if expected real yields rise, while conflict-related uncertainty could support haven demand; nominal rate increases alone do not establish the net effect.