Daily Financial Breakfast 5 November 2026: BoE Rate Increase Takes Rates to 4%; Brent Sheds Over 10% Following U.S. Elections

Market News Today: Rate Decisions and Election Results Drive Trading

• A 25 basis point rise brought the Bank of England’s policy rate to 4%, marking the first increase since 2023.
• With Democrats securing both chambers of Congress, Brent crude lost more than 10% to trade at $93 a barrel, while gold rose beyond $4,050.
• October inflation in the euro area stood at 4.0%, as ECB Governing Council member Ante Zigman described the prospect of another December rate increase as highly likely.
• Agreement that further increases in the policy interest rate were appropriate emerged from the minutes of the Bank of Japan’s September meeting.
• A threat to price stability would draw a policy adjustment without hesitation from the Swiss National Bank, Chairman Martin Schlegel said.
• While calling on France to restore its public finances, Banque de France Governor Emmanuel Moulin said banks were able to cope with rising interest rates.
• Following the Polymarket and Binance hacks, Polygon Labs put forward a hard fork aimed at recovering 70.49 million POL from five attacker-controlled addresses.
• Discussions about a more comprehensive crypto market structure bill for the next Congress were taking place among House Democrats, crypto journalist Eleanor Terrett reported.

Policy and Politics Shape Market Trading

Sterling Recovers After the BoE Decision

The Bank of England’s decision saw sterling recover towards $1.3500, having traded at about $1.3485 during Thursday’s Asian session. The currency had previously retreated below $1.35 after setting a seven-week high of $1.3503 on Wednesday. There was little movement against the euro, while sterling’s pre-decision level against the yen was near 212.93, a decline of 0.16%. Elsewhere, early Asian trading took the euro up to around $1.1245. Wednesday brought a recovery in the Australian dollar from two-week lows; the U.S. Dollar Index subsequently reduced its earlier losses on Thursday.

UK Monetary Policy Tightens

Bank of England Lifts Rate by 25 Basis Points to 4%, Ending Pause Since 2023

A 25 basis point rate rise, widely anticipated by markets, was agreed at the Bank of England’s November meeting on Thursday. Taking the policy rate to 4%, the decision was the bank’s first increase since 2023.

An inflation projection of around 5% by mid-2027 formed the backdrop to Governor Andrew Bailey’s refusal to rule out further tightening. Further monetary tightening also had the support of some policymakers.

In comments following the announcement, Bailey rejected the idea that the bank had been too late to act. He also welcomed the recent fall in oil prices.

U.S. Elections Reshape & Global Markets

Democrats’ Congressional Victory Drives Oil Sell-Off and Gold Gains

Control of both the U.S. House of Representatives and Senate passed to Democrats in the midterm elections, bringing Republican control of Congress under President Donald Trump to a close. The market response included a steep fall in oil, higher gold prices and, initially, a weaker dollar.

According to Rabobank, Brent crude broke below $100 for the first time since October 7 as it shed more than 10% to reach $93 a barrel. WTI’s 9% decline on Wednesday left it hovering near a one-month low in Thursday’s Asian session; by early European trading, it was around $86.40. There was no clear immediate explanation for Wednesday’s WTI fall. Reporting attributed the selling to hopes that the election outcome might help end the Iran war, rather than any confirmed alteration in U.S. policy.

From Wednesday’s daily low of $3,919, gold recovered to trade at $4,047, a gain of nearly 3%. Further gains took it to around $4,065 early in Thursday’s Asian session. The rise of more than 3.60% was the largest since mid-August.

Global Inflation Shapes & Central Bank Policy

Euro Area Inflation Climbs to 4% as ECB’s Zigman Points to Likely December Rise

At 4.0% in October, annual euro area inflation was at its highest in three years, having risen from 3.8% in September. The core measure was unchanged at 2.5%.

The increase reflected price rises throughout the consumer basket, not just energy, said Commerzbank economist Vincent Stamer. He highlighted a three-month annualised core inflation rate of nearly 3%, already above the year-on-year measure.

Euro area GDP growth amounted to 0.2% when Ireland was excluded, according to Standard Chartered economist Christopher Graham. Measured this way, growth momentum had steadily lost pace since the fourth quarter of 2025. Meanwhile, October inflation was higher than the 3.6% fourth-quarter average the ECB had projected in September.

Another interest rate rise at the December meeting was highly likely, ECB Governing Council member Ante Zigman said, according to Bloomberg.

BoJ Members Back Continued Policy Rate Increases

Further increases in the policy interest rate were judged appropriate by Bank of Japan board members at their September meeting, minutes published on Thursday showed. Those minutes set out members’ monetary policy outlook assessments and did not represent a new rate decision.

SNB Stands Ready to Change Policy to Safeguard Price Stability, Schlegel Says

October’s stronger-than-expected inflation figure signalled increased inflationary pressures, Swiss National Bank Chairman Martin Schlegel said. In comments on Wednesday, he pledged that the central bank would not hesitate to alter monetary policy should price stability be put at risk.

ECB’s Moulin Backs Banks’ Ability to Absorb Higher Rates, Calls for French Fiscal Repair

Banks were capable of handling rising interest rates, Banque de France Governor Emmanuel Moulin said on Wednesday. Calling for France to repair its public finances, Moulin was speaking as both the bank’s governor and a member of the ECB’s Governing Council.

Digital Assets Face Recovery Proposals & Regulatory Plans

Polygon Labs Seeks Recovery of 70.49 Million POL Through Hard Fork

Recovery of assets tied to the Polymarket and Binance hacks is the purpose of Polygon Labs’ proposed hard fork of the Polygon Proof-of-Stake mainnet. The proposal envisages a one-off governance action requiring validators to transfer tokens into verified recovery addresses from five addresses controlled by attackers.

Within the total of 70.49 million POL, the proposal covers 23.86 million POL associated with Polymarket and 46.63 million POL associated with Binance. Following its October 30 security incident, Polymarket’s investigation located roughly 28 million POL on Polygon PoS. Of those tokens, approximately 24 million POL were later frozen upon request.

The Bor transaction block list now contains the five addresses, having been updated by block producers, but its operation is constrained. List changes require restarts or span rotations because producers load it only at startup. In addition, entries have no automatic expiry and the filter applies to only certain transaction types. Although the existing block prevents transfers, it cannot return the assets.

Thursday was the scheduled date for discussion of the proposal, which set out roughly two weeks for implementation following approval, if granted.

House Democrats Consider Wider Crypto Market Structure Bill, Terrett Says

A broader cryptocurrency market structure bill for the next Congress is being discussed by House Democrats following their midterm election victories, crypto journalist Eleanor Terrett wrote on X on Wednesday. These talks have not resulted in enacted legislation.

Representative Maxine Waters’ Crypto Investor and Consumer Bill of Rights would form the basis of an expanded proposal, Terrett said. The amendment was introduced when the House considered the Digital Asset Market Clarity Act. As reported, the plans would extend SEC oversight of crypto markets and impose stricter ethics restrictions on Trump and other federal officials.

The initiative would attempt to unite Democratic provisions that failed in the House with measures negotiated by Senate Democrats and Republicans before progress on the CLARITY Act stalled in September.

U.S. Employment Data Comes Next

• October U.S. Nonfarm Payrolls Await Release (6 November 2026): Release of the October U.S. nonfarm payrolls report is due on Friday.