Interest Rate Outlook — November 2026
Monthly macro report · published 1 Nov 2026
Where the rate cycle stands
As global central banks enter the final stretch of 2026, monetary policy divergence is increasingly pronounced across major jurisdictions. While the Federal Reserve and European Central Bank held rates unchanged in late October, hawkish communications and persistent inflation risks keep additional tightening on the table for December. The Bank of England faces a difficult trade-off between sticky 3% CPI inflation and weak GDP growth ahead of its 5 November meeting, whereas the Bank of Japan continues its measured policy normalisation. Market focus centers on whether remaining 2026 decisions will deliver final terminal rate adjustments or extended pauses.
Next decision — what is priced in
| Central bank | Current rate | Next decision | Expected action | Implied odds |
|---|---|---|---|---|
| Federal Reserve Fed funds target range | 3.75% | Dec 9, 2026 | 25bp hike | 65%high |
| European Central Bank Deposit facility rate | 2.50% | Dec 17, 2026 | 25bp hike | 67%high |
| Bank of England Bank Rate | 3.75% | 5 Nov 2026 | Hold | 75%medium |
| Bank of Japan Policy rate | 0.50% | 18 Dec 2026 | Hold | 60%low |
Implied odds are model-derived estimates of market expectations, built from macro data and published central bank guidance — not exchange or futures pricing. Commentary, not investment advice.
Sources used this month: Implied odds are model-derived estimates of market expectations, built from published central bank guidance, current market reporting and macro data — not exchange or futures pricing. Sources read on 2026-11-01: Federal Reserve press releases, ECB press releases, Bank of England news, Bank of Japan releases, Investing.com economic indicators, CNBC economy.
Federal Reserve — 25bp hike expected on Dec 9, 2026
2026 so far: The Federal Reserve held the funds target rate at 3.75% in October following earlier adjustments, maintaining a restrictive policy stance.
With hot PPI readings and hawkish communications from Fed officials emphasizing that inflation work remains unfinished, market pricing reflects a renewed tightening bias into year-end. Policymakers face a delicate balance between deteriorating housing indicators and persistent price pressures ahead of the December projection round. A 25 basis point rate increase remains the primary desk forecast if incoming inflation data fails to cool.
European Central Bank — 25bp hike expected on Dec 17, 2026
2026 so far: The European Central Bank kept its deposit facility rate on hold at 2.50% in late October after earlier policy reductions in 2026.
Following what markets interpreted as a hawkish pause in October, Governing Council communications indicate readiness to adjust policy settings further if price pressures endure. Money markets are pricing a 67% probability of a rate increase at the 17 December projection meeting. The ECB continues to weigh modest euro area GDP expansion against durable service sector inflation.
Bank of England — Hold expected on 5 Nov 2026
2026 so far: The Bank of England has maintained Bank Rate at 3.75% over recent meetings amid persistent inflation and weak growth momentum.
Ahead of the 5 November decision, the Monetary Policy Committee remains constrained by headline CPI at 3.0% alongside stagnant GDP growth of 0.6%. A policy pause is the most probable outcome as the committee assesses the transmission of prior monetary tightening. Any shift toward rate cuts is unlikely before clear moderation in wage growth materialises.
Bank of Japan — Hold expected on 18 Dec 2026
2026 so far: The Bank of Japan has progressively raised its policy rate during 2026 as underlying inflation and wage growth consolidated.
Following its October meeting hold, the Bank of Japan continues to evaluate corporate price pass-through and broader labor market dynamics. While further policy normalisation remains expected over the medium term, the 18 December meeting is anticipated to result in unchanged policy rates. Central bank officials are likely to use the late-year meeting to refine forward guidance on real interest rates.
What would change the outlook
- Re-acceleration of US inflation forcing additional Federal Reserve rate increases into late 2026.
- Eurozone economic stagnation preventing the ECB from delivering market-priced rate adjustments.
- Persistent UK wage growth holding the Bank of England in a prolonged pause despite weak GDP.
- Foreign exchange market volatility accelerating the Bank of Japan policy normalisation pace.
Track the rate cycle live
- 2026 FOMC calendar & interest rate decision dates
- ECB meeting schedule 2026
- Bank of England meeting schedule 2026
- Bank of Japan meeting schedule 2026
- CPI release schedule 2026 — the inflation prints each decision is built on.
- Economic calendar — every macro release, with impact ratings.