BBC Business reported on 5 November 2026 that the Bank of England had raised Bank Rate from 3.75% to 4%. For a business with an overdraft, the first number to look up is the average amount borrowed, not the credit limit.
What does a quarter-point change cost?
Suppose your agreement tracks Bank Rate in full, your margin stays the same and you owe an average of £80,000 for a year. The extra annual interest attributable to this rise would be approximately £80,000 × 0.0025 = £200. It is not 4% of the whole facility on top of what you already pay.
If you draw £80,000 for only 30 days, the same increase adds about £16.44 on a simple 365-day basis. Your lender’s calculation period, daily balances, fees and reset date determine what appears on the statement.
Which borrowing actually reprices?
For each facility, note the balance drawn, the reference rate, the margin, any floor and the next reset or renewal date. A fixed-rate loan within its fixed period is a different cash-flow question from a variable overdraft. A lender’s own variable rate may not move on the same day or by the same amount as Bank Rate.
Check the week when cash is tightest
Lay the next interest debit beside payroll, rent and the dates your largest customers usually pay. A late invoice can keep a business overdrawn for longer; that can matter more than the rate movement itself. If the forecast approaches the facility limit, speak to the lender before payments fall due and ask what fees or terms would apply to any change.
Repeat the calculation with the business’s own figures rather than assuming there will be another rise. The Bank’s November decision establishes today’s reference point, not the path it will take next.
Sources: BBC Business, 5 November 2026; Bank of England November decision and minutes.
Read more financial guidance for business owners.
Keith David is a businessman from a small village in North Wales. He is the author of “The Fat Man’s Guide to Not Being Fat”, “How to Get Rich” and a couple of other self-help books. Best known for his dramatic rise to fame after inventing a dietary plan to lose 7 stone in a week, he is similarly fairly well known for his subsequent fall back into penury. His wife, Anwen David regularly hacks his blog entries and adds factual corrections. You can read Keith’s book on How To Get Rich by visiting Amazon here