Britain's biggest banks are under fire after announcing plans to hit homeowners with interest rate hikes from Friday while failing to pass on higher rates to savers.
Interest rates were cut to 0.5% in March 2009 when the markets were in the grip of the banking crisis and remained at that level until August 2016 when they were cut to 0.25% in the aftermath of the European Union referendum.
"However, don't hold your breath waiting for annuity rates to rise, because it is normally a slow process".
How many more rate rises can we expect?
Most economists believe a rate rise this month would be the only one in 2018, with the next one not due until at least February 2019.
V S Parthasarathy, chief financial officer, Mahindra Group: The rate hike should help temper inflation and hopefully provide a support to the Rupee.
Around two thirds of its mortgage customers are now on fixed-rate products and so will not see their rate change during their fixed-rate period. Any increase in the Bank rate should result in higher gilt yields, which will in turn lead to higher annuities. "However once they do, you're likely to find yourself paying more than your current deal".
The third-quarter 2018 inflation forecast is raised from 2.4% to 2.5% while the third-quarter 2019 inflation forecast is raised from 2.1% to 2.2%.
All savings products linked to the base rate will move in line with the increase from the end of August.
Tory MP Robert Jenrick, Exchequer Secretary to the Treasury, said: "Our balanced approach has helped keep mortgage rates low, while also reducing the national debt and helping with the cost of living".
How will it affect savings?
Asked by business presenter Ian King whether the full rate increase would be passed on to savers, Mr Cutter responded: "Yeah, we'll see what the reaction is in the market".
While deals directly tied to the base rate will change, several providers have said they are still mulling over how they plan to apply the base rate increase to other products - leaving many savers holding their breath.
"Those with tracker mortgages will see them increase automatically and those on variable rates are likely to have any increase passed on in the coming weeks".
But he predicts a quarter-point rise every six months until rates reach 1.5% in 2020.
The repo rates are also hiked to contain inflation in the country.
Incredible view INSIDE a double decker home!.
The last time the BoE raised rates by a quarter of percent in November, the average rate on an easy access account went up just 0.07 percent between September 2017 and this week.
The interest rate rise itself is not a surprise, rather it is a 9-0 decision to do so that has caught markets by surprise.
A Santander spokesman said: 'When we review rates, we consider both the interest we charge for borrowing money, and the rate of interest we can offer on deposits'.