The conditions for persistent inflation in Britain are “crystallising,” Bank of England deputy governor Clare Lombardelli said on Tuesday, signalling she is likely to back another rate rise after last week’s increase to 4%.
MoneyTurkey Economics Desk | 10 November 2026
Key points
- Lombardelli said that, absent evidence of weaker price pressures, there is likely to be a case for a further rate increase in the near term.
- She would not rule December or February in or out, and said every meeting is live.
- She said the UK labour market is in “low gear”, with the problem most acute for workers aged 18 to 24.
What she said
“The conditions for persistent inflationary dynamics over the medium term are crystallising,” Lombardelli said in a speech at a central banking conference hosted by King’s Business School and the Money, Macro & Finance Society, Reuters reported. “That warranted an increase in Bank Rate last week. In the absence of evidence of weaker inflation pressures, I continue to think there is likely to be a case for a further increase in rates in the near term.”
The wording echoes her statement in the minutes of last week’s decision, when she was part of the 8-1 majority that raised Bank Rate to 4% from 3.75%. Asked about coming meetings, she said: “I wouldn’t rule December in or out, February in or out.” Her vote will depend on developments around the Middle East conflict and on price and labour-market data.
The labour-market angle
Most of the speech was about jobs. Lombardelli described a labour market with reduced hiring and job turnover, and warned that a given rise in unemployment may now put less downward pressure on inflation than before, because of a growing mismatch between workers’ skills and employers’ needs. She said that problem looks particularly acute for 18- to 24-year-olds, whose unemployment rate has risen more relative to other workers than elsewhere in Europe.
She said the Bank does not see longer-term public inflation expectations de-anchoring.
Why it matters
Earlier on Tuesday, in an interview with the Guardian, Lombardelli called a December rise “certainly plausible”. The speech goes further, saying a further increase is likely in the near term unless price pressures weaken. Sterling showed no major reaction to the interview comments, with GBP/USD near 1.3452, FXStreet reported.
What to watch
- The December MPC decision
- The next UK labour-market release, for hiring and youth unemployment
- Energy prices and Middle East developments
- Comments from other MPC members before the vote
Related on MoneyTurkey
- BoE’s Lombardelli: Young Hit Hardest by Hiring Freeze
- Riksbank Minutes: Two Members Open to December Hike
For information only. Not investment advice.
Sources
- Reuters via Yahoo Finance: finance.yahoo.com
- Guardian: theguardian.com
- FXStreet: fxstreet.com
- WSJ: wsj.com
- Bloomberg: bloomberg.com
