Daily Financial Breakfast 6 November 2026: BoE Raises Rate to 4% While Fed's Williams Says Inflation Is Too High

Market News Today: Key Takeaways

• The Bank of England raised Bank Rate by 25 basis points to 4.00%, while Chief Economist Huw Pill said on Friday that nothing was baked in for rates next year.
• New York Fed President John Williams said inflation had been too high for too long and described the current period as an appropriate time to gather more information.
• ECB Chief Economist Philip Lane warned that energy inflation would influence wage negotiations and price-setting, with eurozone producer prices up 11.1% annually in September.
• Mexico's central bank unexpectedly cut its policy rate by 25 basis points to 6.25%, describing the move as a one-time adjustment.
• Bank of Japan minutes showed members saw scope for faster rate increases if inflation exceeded expectations, while the yen strengthened on Thursday.
• Bank of Canada Governor Tiff Macklem told the House of Commons that further interest-rate increases might be necessary.
• The Nasdaq Composite fell as much as 5% during Thursday's technology sell-off, while Bitcoin dropped below $76,000 and 24-hour crypto liquidations reached $1.08 billion.
• WTI crude advanced for a second consecutive day to around $90.60 a barrel during Friday's European trading amid persistent Middle East supply concerns.
• President Donald Trump said Iran could not undertake nuclear-program activities without U.S. approval, the Times of Israel reported.
• Binance revoked API keys linked to SignalPlus as a precaution against a potential security threat.

Market Developments

U.S. Equity Futures

During early European trading on Friday, Dow Jones futures fell 0.85% to around 51,170, while S&P 500 futures rose 0.06% to around 7,390 and Nasdaq 100 futures gained 0.90% to around 26,990.

Foreign Exchange

EUR/USD was down 0.4% on Friday at 1.1170. AUD/USD traded around 0.6910 during Asian hours after losing more than 1% the previous day.

Central Banks & Economic Developments

BoE Raises Bank Rate to 4.00% as Energy Shock Lifts Inflation Projections

The Bank of England raised Bank Rate by 25 basis points on Thursday, with eight policymakers supporting the increase to 4.00% and Catherine Mann preferring a larger, 50-basis-point move. All policymakers supported tightening, although they differed over its size.

The November Monetary Policy Report projected inflation at roughly 5% in the second quarter of 2027, compared with an earlier forecast of 3.2% in late 2026. Inflation was projected to return to the 2% target only in the third quarter of 2028. Under an adverse scenario involving a worsening energy shock, inflation would reach 6.2%.

Governor Andrew Bailey said inflationary pressure already in the pipeline justified the increase and warned that it might not be the last. He nevertheless cautioned against treating the decision as the start of an inevitable series of increases. The Bank reported scant evidence of second-round effects but warned that prolonged high energy prices increased the risk of businesses passing on costs and workers seeking larger wage settlements.

The Bank raised its near-term growth projections, forecasting GDP expansion of 1.6% in 2026, followed by 1.3% in 2027 and 1.2% in 2028. It projected a gradual rise in unemployment and stronger pay growth than previously estimated. The government's budget was projected to dampen inflation temporarily, with that effect reversing later.

On Friday, Chief Economist Huw Pill said that “nothing is baked in” for interest rates next year and that he expected greater uncertainty from spring, Reuters reported. Bailey had provided no timetable for another increase. Sterling surrendered its initial post-decision gains, with GBP/USD trading near 1.3450 on Thursday evening after reaching just above 1.3500.

Fed's Williams Calls for More Information as Inflation Remains Too High

New York Federal Reserve President John Williams described the U.S. economy as remarkably resilient and the labour market as stable and solid on Friday, Reuters reported. He said inflation had been “too high for too long” and that returning it to 2% in a timely manner was essential.

Williams said tariff effects had largely worked through prices, while higher energy costs were appearing in airfares. He described the effect of artificial intelligence on prices as narrow, citing chips, and said inflation expectations remained well anchored and wage growth was consistent with the Fed's goal. Monetary policy takes a year or two to take effect, he said, calling this an appropriate time to accumulate more information.

Other Fed officials had argued for gradual tightening on Thursday. Richmond Fed President Thomas Barkin called inflation the central bank's most important risk and said a gradual pace of rate increases made sense. Cleveland Fed President Beth Hammack said gradual increases were less disruptive to the economy and financial system, Reuters reported. U.S. initial jobless claims fell to 189,000.

ECB's Lane Warns Energy Inflation Will Feed Into Wages and Prices

ECB Chief Economist Philip Lane said on Friday that energy inflation would influence wage negotiations and price-setting across the economy, Reuters reported. He said monetary policy's task was to contain spillovers and bring inflation back to target within a year or two.

Lane acknowledged that financial conditions had tightened and described unexpectedly strong exports as a boost to the economy. Fiscal policy had been more expansive than anticipated, he said, although the ECB expected tightening next year and beyond. He called for gathering more information before December and said the system needed a significant liquidity buffer.

President Christine Lagarde said on Thursday that the energy shock and artificial intelligence were pulling in opposite directions, complicating the economic situation. She said incoming data before December would determine whether to raise rates. Eurozone producer prices rose 11.1% from a year earlier in September.

Banxico Unexpectedly Cuts Policy Rate to 6.25%

The Bank of Mexico cut its policy rate by 25 basis points on Thursday, surprising market participants who had anticipated an unchanged rate of 6.50%. Banxico characterised the reduction to 6.25% as a “one-time adjustment.”

The peso weakened against the dollar following the decision. USD/MXN traded at 19.74 after touching a daily low of 18.96.

BoJ Minutes Show Scope for Faster Hikes if Inflation Overshoots

Bank of Japan minutes showed members saw room for faster interest-rate increases if inflation exceeded expectations. The yen strengthened against the dollar on Thursday and outperformed its major peers during a sharp decline in U.S. technology and semiconductor shares.

U.S. Treasury yields also fell during the equity sell-off. The yen's advance contrasted with weakness in sterling, the euro, the New Zealand dollar and the Australian dollar against the U.S. currency later on Thursday.

BoC's Macklem Says Further Rate Increases Remain Possible

Bank of Canada Governor Tiff Macklem told the House of Commons that further interest-rate increases might be necessary.

Equities & Digital-Asset Markets

Nasdaq Falls as Much as 5% as Bitcoin Drops Below $76,000

AI-linked shares led a sharp Wall Street sell-off on Thursday, with the Nasdaq Composite falling as much as 5% and the S&P 500 down 3.5% during the session. The decline came amid concerns about tighter AI and cryptocurrency regulation following Democrats' victory in both chambers of Congress.

Bitcoin fell more than 5% over 24 hours to below $76,000, erasing its gains from Wednesday's post-election rally. Ethereum, Solana and XRP each declined more than 6%, while total cryptocurrency market capitalisation fell 4.5% to $2.71 trillion.

Crypto futures liquidations reached nearly $900 million over four hours and $1.08 billion over 24 hours. Nearly $953 million of the 24-hour total involved liquidated long positions.

Energy & Geopolitics

WTI Advances to Around $90.60 Amid Middle East Supply Concerns

West Texas Intermediate crude gained for a second consecutive day, trading around $90.60 a barrel during European hours on Friday. The advance accompanied continuing Middle East conflict and persistent concerns about oil supplies.

Trump Says Iran Needs U.S. Approval for Nuclear-Program Activities

President Donald Trump said Iran could not do anything pertaining to its nuclear program without approval from the United States, the Times of Israel reported on Thursday.

Digital-Asset Industry

Binance Revokes SignalPlus API Keys Over Potential Security Threat

Binance announced on Thursday that it had revoked application programming interface keys linked to SignalPlus, a third-party institutional technology provider. The exchange described the action as a precautionary measure in response to a potential security threat.

Upcoming Key Events

• U.S. October Nonfarm Payrolls (6 November 2026, 13:30 GMT): The Bureau of Labor Statistics is scheduled to release the October employment report; September payrolls increased by 29,000.