Bankers split on a rate rise today

City analysts believe the three quarter point rises since last August, taking the base rate to 5.25 per cent, are unlikely to be the last. But opinions are divided over whether 5.5 per cent will be reached as early as today.

An increase would heap misery on people locked into variable rate mortgages, and lead to rises in credit card and loan rates. The rises over the last six months

have already triggered real problems for those who borrowed heavily. There has been a corresponding rise in bankruptcy and home repossessions.

The Consumer Credit Counselling Service said yesterday that calls to its helpline rose to 86,990 in the first three months of the year - a third higher than last year. Citizens Advice also reported a surge of borrowers worried about mortgage arrears and repossession orders.

The rates decision is in the hands of the bank's Monetary Policy Committee. Last month, eight of its nine members voted not to change and one argued for a cut.

Howard Archer, chief UK economist at Global Insight, said the MPC would probably delay any rate change to assess the impact of the earlier rises.

But George Buckley, economist at Deutsche Bank, thinks a rise can be justified by reports that the economy, house prices, manufacturing and high street prices are growing faster than expected.

"This looks likely to be a difficult decision for the committee," he said.