Rate hike feared

Nearly two-thirds of Britons expect a rate increase according to a Bank of England poll, the highest level in over two years.

Yet most people would prefer the rate to go down. In the same survey, 36 per cent said that they would be better off personally with a decrease in the rate compared to 19 per cent saying that an increase was good.

Fears of a rate hike and the subsequent increase in repayments on loans and mortgages linked to it were stoked by Gordon Brown at the weekend.

Speaking in Hong Kong, the chancellor announced his intention to continue to work to get inflation down from 2.5 per cent to two per cent.

With speculation growing in financial circles that another rate increase will be needed soon to achieve this goal, workers may start saving up now for when larger loan repayments hit.