London Daily

Focus on the big picture.
Thursday, Apr 23, 2026

Bank of England chief warns of fresh interest rate hike

Bank of England chief warns of fresh interest rate hike

The governor of the Bank of England has warned interest rates may need to rise by more than previously expected.

Speaking in Washington, Andrew Bailey said "inflationary pressures" meant a "stronger response" could be needed from the Bank than thought in August.

The next rate rise decision is on 3 November, days after the government lays out its economic plans.

Meanwhile, Mr Bailey described his discussions with the new Chancellor Jeremy Hunt as a "meeting of minds".

Mr Hunt, who was appointed on Friday after his predecessor Kwasi Kwarteng was abruptly sacked, has confirmed the government will set out its tax and spending plans on 31 October.

He has already signalled that some taxes could rise and public spending may fall.

Mr Bailey said the Bank will not take any action on interest rates until after this fiscal plan is announced, describing this as "the correct sequence" of action.

But speaking on Saturday, he said officials would "not hesitate to raise interest rates to meet the inflation target" of 2%.

The warning comes just weeks after the Bank hiked interest rates by 0.5% to 2.25% on 22 September.

Prior to Mr Bailey's comments, the markets were expecting a rise of between 0.75% and 1% when the Bank's Monetary Policy Committee makes its next rates decision in November.

Mr Bailey also commented on the effects of the government's recent mini-budget, which he said had been followed by some "some violent moves in the last few weeks" in UK markets.

He also spoke of the need "to have the Office for Budget Responsibility (OBR) involved" in the government's budget discussions, adding that "flying blind is not a way to achieve sustainability".

Last month, it was revealed that Mr Kwarteng had refused to allow the OBR to review the impact of his mini-budget on the economy before he delivered the statement.

The governor's intervention comes just hours after Mr Hunt told the BBC that some taxes could rise in the coming months and some departments could see their budgets slashed.

Marking a significant change in government policy, the chancellor told the Today programme that difficult decisions will be needed "across the board".

Taking questions after his speech in Washington, Mr Bailey signalled that he was in lockstep with the new chancellor.

"I can tell you that I spoke to Jeremy Hunt, the new chancellor, yesterday", Mr Bailey said.

"I can tell you that there was a very clear and immediate meeting of minds between us about the importance of fiscal sustainability and the importance of taking measures to do that."

He added that the comment was intended as a "clear message for markets".


Watch: The Bank of England "will not hesitate to raise rates", says governor Andrew Bailey


Newsletter

Related Articles

0:00
0:00
Close
Crypto Scammers Capitalize on Maritime Chaos Near the Strait of Hormuz: A Rising Threat to Shipping Companies
Changi Airport: How Singapore Engineered the World’s Most Efficient Travel Experience
Power Dynamics: Apple’s Leadership Shakeup, Geopolitical Risks in the Strait of Hormuz, and Europe's Energy Strategy Amidst Global Challenges
Apple's Leadership Transition: Can New CEO John Ternus Navigate AI Challenges and Geopolitical Pressures?
Italy’s €100K Tax Gambit: Europe’s Soft Power Tax Haven
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
×