Bank of England and euro-zone inflation: the week ahead in Europe
In short
- The Bank of England decides on Thursday 5 November at 12:00 UK time and is expected to raise Bank Rate by 0.25 points from 3.75%. At the September meeting the vote was 6–3 to hold, with three members voting for a rise to 4%.
- Euro-zone flash inflation for October is due on Wednesday 4 November. September was 3.8% (core 2.5%); national October readings are Germany 2.8%, France 3.4%, Italy 5.4% and Spain 4.9%.
- At Friday’s close the DAX was 25,818 (−0.9%), the Euro Stoxx 50 6,131 (−1.2%) and the FTSE 100 10,730 (+0.1%). One euro costs £0.8338 and $1.1172.
Two European events this week could move borrowing costs: the Bank of England’s expected rate rise on Thursday and the first estimate of October euro-zone inflation on Wednesday. Yesterday we covered the ECB’s decision to hold at 2.5%; this is what comes next.
What happened
Bank Rate has been 3.75% since the cut of 18 December 2025. At the 17 September meeting the Bank held, 6–3, with Greene, Mann and Pill voting for 4% (Cambridge Currencies). Newsquawk lists a 0.25-point rise on Thursday as the expectation, which would start a tightening cycle; the first thing to watch is the vote split. The decision comes at 12:00 UK time with a new Monetary Policy Report.
Eurostat publishes the flash estimate for October on Wednesday. September inflation in the euro zone was 3.8% (3.2% in August), with core at 2.5% and services at 3.2%. National October figures are mixed: Germany fell to 2.8% from 3.3%, while France rose to 3.4% from 3.1%, Italy to 5.4% from 4.2% and Spain stayed at 4.9% (Euronews). Pantheon’s forecast for the euro zone is 4%, which would be up from 3.8% in September.
European shares ended Friday mostly lower: the DAX fell 0.9% to 25,818, the Euro Stoxx 50 fell 1.2% to 6,131, while the FTSE 100 edged up 0.1% to 10,730. In the morning reading a euro cost £0.8338 and $1.1172.
What it means for you
The maths: a 0.25-point rise on a £250,000 repayment mortgage over 25 years adds about £36 a month (from £1,389.58 to £1,425.29 at illustrative rates of 4.5% and 4.75%), or roughly £429 a year. Variable and tracker rates usually follow Bank Rate quickly; fixed rates change when the deal ends.
The Bank’s September minutes, quoted by Cambridge Currencies, put two-year fixed mortgage rates about 0.95 percentage points above their level before the Middle East conflict began, so borrowing costs had risen even before Bank Rate moved. Euro-zone inflation matters to UK savers and investors mainly through the euro (£0.8338) and European share prices.
Live prices: UK and European share prices and gold prices in the UK.
Bottom line
The Bank of England is expected to lift Bank Rate from 3.75% on Thursday after a 6–3 vote to hold in September, and the euro-zone flash estimate on Wednesday follows a 3.8% reading for September. European shares ended Friday mostly lower, with the euro at £0.8338.
Sources: Newsquawk · Euronews · Cambridge Currencies
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