Several major central banks raised interest rates this week, but they are at very different stages of the tightening cycle, with some just getting started and others potentially nearing the end, according to a Reuters roundup by Sophie Kiderlin and Stefano Rebaudo published on November 5, 2026. The Bank of England (BoE) raised rates for the first time in more than three years on Thursday, taking its policy rate to 4%. The BoE said at least one further increase was likely if the Middle East conflict continues, and projected that British inflation would rise to around 5% in mid-2027.
All members of the Monetary Policy Committee voted to raise rates, with one backing a larger increase. BoE Governor Andrew Bailey spoke at the Monetary Policy Report press conference in London. The Reserve Bank of Australia (RBA) lifted its cash rate to 4.85% this week, its fifth increase of 2026 and the highest level in 18 years.
However, the vote was unexpectedly close and the bank struck a less hawkish tone, suggesting policymakers may be nearing the end of their tightening campaign. Markets are not pricing in further increases. Reuters reported that policymakers remain wary of inflation, and that the outlook for interest rates will depend in part on developments in the Middle East conflict and their impact on energy prices, which have fallen since Democrats swept the US midterm elections.
In the United States, the Federal Reserve left rates unchanged last week, awaiting further evidence on inflation, which it said remained elevated. President Donald Trump has repeatedly called for lower rates and accused policymakers of being “hostile” and “partisan” after the September rate increase. Fed Chair Kevin Warsh rejected those accusations, stressing the central bank’s independence.
Markets are pricing an 80% chance of a rate increase in December and expect further tightening in 2027. Norges Bank left rates unchanged on Thursday, as expected, after raising them twice this year, and reiterated that further tightening remains possible to contain inflation. In New Zealand, the Reserve Bank surprised markets by keeping its official cash rate at 2.75% in a narrow vote, rather than delivering a third consecutive increase.
Governor Anna Breman said the chances of a rate rise in December were “high.” In the euro zone, the European Central Bank (ECB) left rates unchanged last week but warned that inflation risks were rising. Data released on Wednesday showed inflation accelerated to a three-year high in October. Policymakers are also monitoring a sharp rise in France’s debt risk premium, driven by investor concerns about the country’s debt burden and uncertain fiscal outlook.
ECB President Christine Lagarde also announced her early resignation. The Bank of Canada raised its key rate by 25 basis points to 2.5% last week, its first increase in more than three years, but Governor Tiff Macklem said policy remained slightly accommodative, as the rate is still below the 2.75% level the bank estimates is neither restrictive nor expansionary. Sweden’s Riksbank raised its policy rate to 2% on Wednesday, its first increase since 2023, and signalled further hikes, although money markets are not fully pricing another move until March 2027.
The Bank of Japan (BoJ) kept rates steady last week, as expected. The bank declared victory in its nearly 14-year effort to achieve its inflation target, while signalling vigilance over price pressures and suggesting another increase could come soon. It also nudged up its inflation forecasts, as recent data pointed to broadening price pressures.
The Swiss National Bank is expected to keep its policy rate at 0% in the coming months. Its September meeting minutes showed policymakers believed monetary conditions were appropriate to keep inflation within target. Inflation rose to its highest level in nearly three years in October but, at 1.5%, remains well contained.
Low yields should help prevent excessive appreciation of the Swiss franc, although geopolitical tensions have increased demand for safe-haven assets this year. Source: Reuters, “BoE joins the rate hike club, Australia may be done already,” November 5, 2026.
Source: centraloregondaily.com