The Bank of England's Monetary Policy Committee has voted 7-2 to increase Bank Rate by 0.25% to 4.25%. The decision to lift rates for the 11th time in a row comes after figures showed the cost of living rising by more than expected. Inflation jumped to 10.4% in the year to February, despite predictions it would fall.

UK rates are now at the highest level since October 2008, just as the global economy was in the grips of the financial crisis.

As a result of this rise people on tracker and variable rate deals usually see an immediate increase in their monthly payments.

 

For the average UK property costing £270,708 on a variable rate and with a 75% LTV, monthly mortgage repayments would increase by £26 a month, according to data from TotallyMoney and Moneycomms.

Three-quarters of mortgage customers hold a fixed-rate mortgage so their payments should not be affected for now but prospective house buyers or those seeking a remortgage will pay more.