Daily Financial Breakfast 5 November 2026: Why Did Brent Fall Over 10% After U.S. Elections as BoE Raised Rates to 4%?

Market News Today: What Is Driving Markets?

• UK policy rates moved up to 4% as the Bank of England delivered a 25 basis point rise, its first since 2023.
• A fall of more than 10% left Brent crude at $93 a barrel, while gold moved above $4,050, after Democrats took control of both chambers of Congress.
• With euro area inflation at 4.0% in October, ECB Governing Council member Ante Zigman indicated that another December rate increase was highly likely.
• Further policy interest rate increases were considered appropriate by Bank of Japan members, the minutes of their September meeting showed.
• Any threat to price stability would prompt the Swiss National Bank to adjust policy without hesitation, Chairman Martin Schlegel said.
• Banks could withstand rising interest rates, Banque de France Governor Emmanuel Moulin said, while urging France to repair its public finances.
• Recovery of 70.49 million POL from five attacker-controlled addresses is the aim of a Polygon Labs hard fork proposal following the Polymarket and Binance hacks.
• A broader crypto market structure bill for the next Congress was under discussion among House Democrats, crypto journalist Eleanor Terrett reported.

What Is Moving the Markets?

How Are Currencies Trading?

Sterling’s recovery towards $1.3500 followed the Bank of England decision, after the currency had traded near $1.3485 during Thursday’s Asian session. On Wednesday, it had touched a seven-week high of $1.3503 before falling back below $1.35. Sterling was largely unchanged against the euro; ahead of the decision, it was trading near 212.93 against the yen, down 0.16%. Early Asian trade brought the euro to around $1.1245. A Wednesday recovery lifted the Australian dollar from two-week lows, whereas Thursday saw the U.S. Dollar Index trim its earlier losses.

What Is the Outlook for UK Monetary Policy?

What Does the Bank of England’s First Rate Rise Since 2023 Mean for Policy at 4%?

UK policy rates reached 4% on Thursday as the Bank of England announced a 25 basis point increase at its November meeting. Markets had widely expected the move, which ended a period without rate increases dating back to 2023.

With inflation expected to reach around 5% by mid-2027, Governor Andrew Bailey did not rule out additional tightening. Calls for further monetary tightening also came from some policymakers.

Addressing the decision afterwards, Bailey disputed the suggestion that the bank had acted too late and welcomed the latest decline in oil prices as positive news.

How Are U.S. Elections Shaping & Global Markets?

Why Did Oil Fall and Gold Rise After Democrats Took Congress?

Sharp losses in oil, gains in gold and an initial weakening of the dollar followed the Democrats’ midterm election victory. Their capture of the U.S. House of Representatives and Senate brought Republican control of Congress under President Donald Trump to an end.

According to Rabobank, Brent crude’s decline of more than 10% to $93 a barrel took it under $100 for the first time since October 7. WTI, meanwhile, was trading around $86.40 in early European hours on Thursday, having stayed close to a near one-month low during the Asian session after Wednesday’s 9% fall. What immediately triggered Wednesday’s WTI sell-off remained unclear. Reports linked it to hopes that the election result could bring an end to the Iran war, rather than to a confirmed U.S. policy change.

A recovery from Wednesday’s daily low of $3,919 brought gold to $4,047, representing a rise of nearly 3%. The metal then climbed to around $4,065 in Thursday’s early Asian session. At more than 3.60%, the advance was its strongest since mid-August.

What Does Global Inflation Mean for & Central Banks?

Will 4% Euro Area Inflation Be Followed by a December Rate Rise? ECB’s Zigman Signals High Chance

A three-year high of 4.0% was recorded for annual euro area inflation in October, up from September’s 3.8%. There was no change in core inflation, which stood at 2.5%.

The rise in prices was not confined to energy but spanned the consumer basket, according to Commerzbank economist Vincent Stamer. The three-month annualised core inflation rate, he pointed out, was already close to 3% and exceeded the year-on-year reading.

Stripping out Ireland, euro area GDP growth was 0.2%, Standard Chartered economist Christopher Graham said. On this basis, growth momentum had slowed continuously since the fourth quarter of 2025. October inflation also exceeded the 3.6% fourth-quarter average projected by the ECB in September.

Bloomberg reported that another interest rate increase at December’s meeting was highly likely in the view of ECB Governing Council member Ante Zigman.

What Do BoJ Minutes Reveal About Further Rate Increases?

Thursday’s release of the Bank of Japan’s September meeting minutes revealed agreement among board members that policy interest rates should continue to rise. The document reflected their views on the monetary policy outlook, not a fresh interest rate decision.

How Would the SNB Respond to Price Stability Risks? Schlegel Signals Readiness to Act

After October inflation came in above expectations, inflationary pressures had intensified, Swiss National Bank Chairman Martin Schlegel said. In his remarks on Wednesday, he made clear that the central bank would change monetary policy without hesitation if price stability were endangered.

Can Banks Manage Rising Rates? ECB’s Moulin Also Calls for French Fiscal Repair

Higher interest rates were something banks could manage, Banque de France Governor Emmanuel Moulin said on Wednesday. Alongside that assessment, Moulin, also an ECB Governing Council member, urged France to repair its public finances.

What Is Changing in Digital Assets & Regulation?

How Would Polygon Labs’ Proposed Hard Fork Recover 70.49 Million POL?

A hard fork of the Polygon Proof-of-Stake mainnet has been proposed by Polygon Labs as a way to recover assets connected to the Polymarket and Binance hacks. As a one-off governance action, the proposal would oblige validators to move tokens held in five attacker-controlled addresses into verified recovery addresses.

Of the 70.49 million POL covered by the plan, 23.86 million POL relates to Polymarket and 46.63 million POL to Binance. An investigation by Polymarket into its October 30 security incident found roughly 28 million POL on Polygon PoS. Subsequently, approximately 24 million POL of those tokens were frozen upon request.

The five addresses are already on the Bor transaction block list maintained by block producers, although the mechanism is limited. Because each producer loads the list only on startup, changes depend on restarts or span rotations. The filter applies only to certain transaction types, and its entries do not expire automatically. While the current block stops transfers, it does not provide a way to recover the assets.

Discussion was set for Thursday, with the proposal allowing roughly two weeks for implementation should it receive approval.

What Broader Crypto Bill Are House Democrats Discussing? Terrett Reports Plans

Following their midterm election wins, House Democrats are considering a broader cryptocurrency market structure bill for the next Congress, according to crypto journalist Eleanor Terrett’s Wednesday post on X. These remain discussions, not enacted legislation.

According to Terrett, Representative Maxine Waters’ Crypto Investor and Consumer Bill of Rights would be expanded under the proposal. The amendment had been introduced during the House’s consideration of the Digital Asset Market Clarity Act. As reported, the plans envisage wider SEC oversight of crypto markets, alongside tighter ethics restrictions for Trump and other federal officials.

The aim would be to bring together Democratic provisions that the House rejected and measures negotiated between Senate Democrats and Republicans before the CLARITY Act stalled in September.

Which Key Events Are Next?

• October U.S. Nonfarm Payrolls Report (6 November 2026): Friday’s release schedule includes the October U.S. nonfarm payrolls report.