UK consumers are braced for further base rate hikes this year, research from Lloyds TSB has shown.

More than three-quarters of people told the bank they expected further rate rises on top of the four quarter-point rises since last summer.

But most customers, like financial experts, did not expect the Bank of England’s Monetary Policy Committee to hike rates beyond their current level of 5.5 per cent at the monthly meeting scheduled for this week.

Interest rate increases have been introduced in a phased way to date, with one month’s gap or more between the August, November, January and May rises.

Consumers were even beginning to be pessimistic about the wider economic outlook, with 36 per cent saying they expected employment prospects to be worse in a year’s time, Lloyds TSB claimed.

However, new consumer confidence ratings released this week by Nationwide building society suggested confidence soared to its highest level in eighteen months in May.

Still, the extent to which bank customers are readying their finances for the impact of rate rises, which push up mortgage and loan repayments while increasing returns on saving and investments, could vary.

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