Bank of England Hikes to 4% and Sees Inflation Near 5%, as US Mortgage Rates Fall to 7.18%

3 hours ago

3 min read

The Bank of England raised Bank Rate by a quarter point to 4% on November 5, its first increase since August 2023, and said inflation should reach about 5% by mid-2027. The vote was 8-1, and the one dissenter wanted a half point.

On the same day, Freddie Mac reported the US 30-year mortgage rate down for a third straight week, to 7.18%. Two of the rates that matter most to our buyers moved in opposite directions within hours.

What happened

Bank Rate: up 0.25 points to 4%. Catherine Mann voted for 4.25%. Next decision: December 17.
UK inflation: 3.5% in September, projected to peak around 5% by mid-2027, according to the Monetary Policy Summary and minutes.
The cause: energy. The minutes note the Middle East conflict is in its ninth month, with Brent averaging $108 a barrel over the 15 working days to October 27.
UK mortgages: two-year fixed rates are up nearly half a point since early September.
US 30-year fixed: 7.18%, against 7.24% last week and 6.22% a year ago, per Freddie Mac.
US 15-year fixed: 6.57%, against 6.60% last week and 5.50% a year ago.
The other central banks: the Fed held at 3.75%–4% on October 28 in a 10-2 vote, with Lisa Cook and Beth Hammack preferring a hike. The ECB held its deposit rate at 2.50% on October 29. The Bank of Canada raised to 2.5% on October 28.

Governor Andrew Bailey said the increase "shouldn't be seen as the first in an inevitable long sequence of hikes," then added that "unless the conflict in the Middle East is resolved, neither does it seem likely to be the last increase." Committee member Alan Taylor went further, calling it an insurance move and "not the start of a hiking cycle."

Why it matters

The US number comes with a warning. The drop to 7.18% tracks Treasury yields, not a softer Fed. The 10-year yield stood near 4.84% early Friday, according to Yahoo Finance, after a Wednesday stock sell-off that erased about $2.3 trillion of market value on worries over AI spending. Yields eased as money looked for safety. That can reverse quickly, and US October jobs data was due as we published.

On a US$500,000, 30-year loan, 7.18% means about $3,387 a month, about $20 less than a week ago. It is still about $318 more than at last year's 6.22%. A New York or Miami owner refinancing to free up cash for a Caribbean purchase is paying for that gap.

For UK and European buyers the question is currency. Sterling held around $1.35 and the euro around $1.12–1.13 on November 5, per Knightsbridge Foreign Exchange. Dutch-side Sint Maarten is priced in US dollars, so a US$600,000 condo in Maho costs about £445,000 or €533,000 at those levels. French-side property in Marigot, Grand Case or Terres Basses is priced in euros, which removes the currency question for eurozone buyers.

Closer to home, the Central Bank of Curaçao and Sint Maarten raised its rate to 4.50% in September, and the Caribbean guilder stays pegged at 1.79 to the dollar. Local borrowing costs follow the Fed, not London or Frankfurt.

Our read

Central banks are no longer moving together. London has just hiked, Ottawa has just hiked, Frankfurt and Washington are holding with hawks in the room. Anyone planning a purchase next year should stop assuming that lower rates will arrive and make the deal work on today's numbers.

We would treat the fall in US mortgage rates as a window, not a trend. Three weeks of declines came during a market scare, and a 7% rate remains the base case until the data says otherwise. Many of our buyers pay cash or use home-market equity, so the rate often matters less than the value of the asset they are drawing on.

This is not financial advice. For how lenders treat non-residents here, see our buyer's guide, or ask our team to run a purchase in your own currency.

Sources: Bank of England, Monetary Policy Summary and Minutes, November 5, 2026; MoneyWeek, November 5, 2026; Freddie Mac Primary Mortgage Market Survey, November 5, 2026; Fortune, October 28, 2026; Yahoo Finance, November 6, 2026; Knightsbridge Foreign Exchange, November 5, 2026.