Daily Financial Breakfast 5 November 2026: BoE Raises Rates to 4% While Brent Falls Over 10% After U.S. Elections

Market News Today: Key Takeaways

• The Bank of England raised its policy rate by 25 basis points to 4%, delivering its first increase since 2023.
• Brent crude fell more than 10% to $93 a barrel after Democrats won control of both chambers of Congress, while gold advanced above $4,050.
• Euro area inflation reached 4.0% in October, while ECB Governing Council member Ante Zigman said there was a high chance of another rate increase in December.
• Bank of Japan September meeting minutes showed members agreed that continuing to increase the policy interest rate was appropriate.
• Swiss National Bank Chairman Martin Schlegel said the bank would not hesitate to adjust policy if price stability was endangered.
• Banque de France Governor Emmanuel Moulin said banks could handle rising interest rates and called for France to repair its public finances.
• Polygon Labs proposed a hard fork to recover 70.49 million POL held in five attacker-controlled addresses following the Polymarket and Binance hacks.
• Crypto journalist Eleanor Terrett reported that House Democrats were discussing a broader crypto market structure bill for the next Congress.

Market Developments

Foreign Exchange

Sterling reached a seven-week high of $1.3503 on Wednesday before retreating below $1.35. It traded near $1.3485 in Thursday’s Asian session and rebounded toward $1.3500 after the Bank of England decision, while remaining little changed against the euro. Before the decision, sterling was down 0.16% against the yen near 212.93. The euro rose to around $1.1245 in early Asian trading. The Australian dollar recovered on Wednesday from two-week lows, while the U.S. Dollar Index pared earlier losses on Thursday.

UK Monetary Policy

Bank of England Raises Rates to 4% in First Increase Since 2023

The Bank of England increased its policy rate by 25 basis points to 4% at its November meeting on Thursday. The widely anticipated decision marked its first rate increase since 2023.

Governor Andrew Bailey left open the possibility of further tightening, with inflation projected to reach around 5% by mid-2027. Some policymakers also called for further monetary tightening.

Speaking after the decision, Bailey said he did not think the bank had acted too late. He described the latest fall in oil prices as positive news.

U.S. Elections & Global Markets

Oil Slumps and Gold Rallies After Democrats Win Congress

Democrats won control of the U.S. House of Representatives and Senate in the midterm elections, ending Republican control of Congress under President Donald Trump. Oil prices fell sharply, while gold advanced and the dollar initially weakened.

Brent crude dropped more than 10% to $93 a barrel, moving below $100 for the first time since October 7, Rabobank said. WTI fell 9% on Wednesday and remained close to a near one-month low in Thursday’s Asian session before trading around $86.40 in early European hours. The immediate trigger for Wednesday’s WTI decline was unclear; reporting linked the selloff to hopes for an end to the Iran war following the election result, rather than a confirmed change in U.S. policy.

Gold traded at $4,047 on Wednesday after recovering from a daily low of $3,919, a gain of nearly 3%. It subsequently reached around $4,065 in early Asian trading on Thursday, with the advance exceeding 3.60%, its biggest gain since mid-August.

Global Inflation & Central Banks

Euro Area Inflation Reaches 4%; ECB’s Zigman Flags December Rate Increase

Euro area annual inflation rose to 4.0% in October from 3.8% in September, reaching its highest level in three years. Core inflation remained at 2.5%.

Commerzbank economist Vincent Stamer said the increase extended beyond energy to prices across the consumer basket. He noted that the three-month annualised core inflation rate was already nearly 3%, above the year-on-year reading.

Standard Chartered economist Christopher Graham said euro area GDP growth excluding Ireland was 0.2%, with growth momentum on that basis slowing steadily since the fourth quarter of 2025. October’s inflation reading was also above the ECB’s September projection of average inflation of 3.6% in the fourth quarter.

ECB Governing Council member Ante Zigman said there was a high chance of another interest rate increase at the December meeting, Bloomberg reported.

BoJ Minutes Show Agreement on Continuing Rate Increases

Bank of Japan board members agreed that it was appropriate to continue increasing the policy interest rate, according to minutes of the September meeting released on Thursday. The minutes recorded members’ views on the monetary policy outlook rather than a new rate decision.

SNB’s Schlegel Says Bank Will Adjust Policy if Price Stability Is Threatened

Swiss National Bank Chairman Martin Schlegel said inflationary pressures had increased after October’s inflation figure exceeded expectations. Speaking on Wednesday, he said the central bank would not hesitate to modify monetary policy if price stability was endangered.

ECB’s Moulin Says Banks Can Handle Higher Rates and France Must Fix Finances

Banque de France Governor Emmanuel Moulin said on Wednesday that banks could deal with rising interest rates. Moulin, who also sits on the ECB’s Governing Council, called for France to repair its public finances.

Digital Assets & Regulation

Polygon Labs Proposes Hard Fork to Recover 70.49 Million POL

Polygon Labs proposed a hard fork of the Polygon Proof-of-Stake mainnet to recover assets linked to the Polymarket and Binance hacks. The proposed one-off governance action would require validators to transfer tokens from five attacker-controlled addresses to verified recovery addresses.

The plan covers 23.86 million POL linked to Polymarket and 46.63 million POL linked to Binance, totalling 70.49 million POL. Polymarket’s investigation into its October 30 security incident identified roughly 28 million POL on Polygon PoS, of which approximately 24 million POL were subsequently frozen upon request.

Block producers have placed the five addresses on the Bor transaction block list, but that mechanism has limitations. Each producer loads the list only at startup, so updates require restarts or span rotations; entries do not expire automatically, and the filter covers only certain transaction types. The existing block prevents transfers without providing a mechanism to return the assets.

The proposal was scheduled for discussion on Thursday and outlined an implementation timeline of roughly two weeks if approved.

Terrett Reports House Democrats Discussing Broader Crypto Legislation

House Democrats are discussing plans for a broader cryptocurrency market structure bill in the next Congress, crypto journalist Eleanor Terrett reported in an X post on Wednesday. The discussions follow Democrats’ midterm election wins and do not constitute enacted legislation.

Terrett said the proposal would expand Representative Maxine Waters’ Crypto Investor and Consumer Bill of Rights, an amendment introduced during House consideration of the Digital Asset Market Clarity Act. The reported plans include broader SEC oversight of crypto markets and stricter ethics restrictions affecting Trump and other federal officials.

The initiative would seek to combine Democratic provisions rejected in the House with measures Senate Democrats negotiated with Republicans before the CLARITY Act failed to advance in September.

Upcoming Key Events

• U.S. October Nonfarm Payrolls (6 November 2026): The October U.S. nonfarm payrolls report is scheduled for release on Friday.