At a research conference today, Spencer Dale, the chief economist for the Bank of England commented to the Association of British Insurers that interest rates could be increased just as aggressively as they were cut once the economy begins to stabilise.

Mr Dale explained that the MPC made the interest rate cuts with the full understanding that they would need to be increased in equal measure to combat inflation. Stating

"The committee adjusted monetary policy boldly and decisively on the way down in order to meet the inflation target"

"And, let me assure you that, when the time comes, we will be prepared to respond with equal vigour on the way back up."

And also commenting that he expected to see signs of recovery by the end of this year.

This may worry the large amount of households currently sitting on their lenders standard variable rate and enjoying the temporary low payments as a result. We always knew this couldn't last forever, but the news that rates could be increasing as early as the end of this year may prompt some to start considering refinance mortgages.