Analysts have determined that many, in fact millions, would be in financial hardship should the interest rate raise slightly. According to one economist the rates may rise substantially. The prediction is that the rate will spiral rapidly due to inflation.

Should inflation grow out of control the Bank of England will be forced to raise rates to keep it under check. Dr. Andrew Lilico, a member of the Policy exchange think-tank has warned that the interest rate could increase to 8 per cent by 2012. That rate could add 900 pounds to the average monthly mortgage bill.

Lilico said: "To keep inflation (as measured by the retail Prices Index) down to only 10 per cent for one year, the economy will have to be able to tolerate interest rates of perhaps 8 per cent."

Even Deputy Governor of the Bank of England, Sir John Gieve, has warned that the rates could move much faster than what is expected. He expects the rate to move from 0.5 per cent to 2.5 per cent within one year’s time.

If indeed the base rate saw an increase to 8 per cent and banks kept their mark up of 3.5 per cent then homeowners with loans tied to the base rate would fact an interest of 11.5 per cent.

Dr. Lilico believes that inflation will eventually bring on another recession by 2013 to 2014.

"Given the constraints of late 2008 and the absurdities of subsequent fiscal, finance and regulatory policy, if we can get away with a recession of only 6.6 per cent, deflation of only 2 per cent and subsequent] inflation of only 10 per cent for one year, [Bank of England governor] Mervyn King will deserve a medal."

Dr. Lilico’s controversial viewpoint of the economy also forecasts a double dip recession in early 2011 and then a short lived boom in the economy. Of course Mr. Lilico’s forecast is outnumbered by those that believe the interest rate will stay unchanged and inflation in check for many years ahead as the economy sees slow growth.