Adam Oldfield, chief revenue officer at Phoebus, says:

“Whether today’s base rate increase will immediately affect mortgage rates is unlikely after recent increases following the surge in swap rates.

“However, borrowers seeing the headline today will be fearing that another hike is inevitable.

“With 2-year fixes standing around six per cent the decision for those coming off fixed rates will be a difficult one.

“Do you fix at six or drift onto an SVR in the hope that at some point in the next two years rates come down? Not an easy decision, especially if as many believe the Bank hasn’t yet finished putting rates up.

“The fact that we have been living in an artificially low interest environment for so long means that, perhaps, some borrowers became complacent.

“Now the increase to their mortgage payments has come as a massive shock.

“Nonetheless, paying the mortgage is not optional and as such borrowers are going to need to adjust to this new environment, the new normal.

“Unfortunately, there will be some that simply can’t manage, for whatever reason.

“We are already seeing the rate at which arrears are rising increase and lenders are going to need to be prepared.

“It will be very interesting to see what comes out of the Chancellor’s summit tomorrow. Will there be increased pressure from the Government for lender leniency?”