Borrowers warned of another interest rate rise before Christmas in punishing blow to family finances

Updated: 05:43 EST, 10 November 2026 Borrowers on both sides of the Atlantic face more pain in the run-up to Christmas as officials warn December rate hikes could be on the way.In a blow to millions of home owners already reeling from last week’s Bank of England rate increase, deputy governor Clare Lombardelli said a move next month was 'certainly plausible'.And US Federal Reserve official Christopher Waller said he backed a hike and was open to an increase of as much as half a percentage point.The comments come as both central banks battle to bring down inflation - which is running well above their 2 per cent targets.US inflation figures later could add to the pressure for a Fed hike.Yet a fall in oil prices to below $90 is likely to ease inflationary pressures if sustained. The Bank of England raised rates to 4% this month and could strike again in DecemberFinancial markets - already on edge after last week’s midterm elections which caused a major tech sell-off - will be on the alert for any sign that central banks are preparing to turn the screw on borrowers again.Until last week, the Bank of England had resisted rate hikes in the face of the inflation pressures caused by the Iran war.But at their latest meeting they concluded that the elevated energy prices over recent months meant that it was time to act - raising rates from 3.75 per cent to 4 per cent.It was the first rate hike in the UK since August 2023 - and borrowers now face another rise to 4.25 per cent as soon as next month.In a new interview, Lombardelli told the Guardian: 'Every meeting is live for us. December is, you know, it’s certainly plausible. What’s the market pricing at the moment? It’s about 50/50 for December.'I think it depends what we see on the conflict and the energy prices and it depends what we see in the wider data and how all that fits together. But I wouldn’t rule it out. Equally, I don’t have enough information just yet.'And Fed governor Waller said that if core inflation remains elevated then ‘hiking only 25 basis points would put our credibility at risk’.Speaking at a Bank of England conference in London, he added: 'Even if, as I expect, the monthly rate of inflation improves in October, I am leaning toward supporting an increase in our policy rate of 25 basis points at the December meeting.‘But if the October inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3 per cent or even higher — then a stronger policy move may be needed.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you