Interest Rates Up.

In the light of a difficult decision for the Bank of England, two of the country's main lenders have already preempted what might happen.

The Abbey and Woolwich have both raised the costs of their new fixed rate mortgages, with other lenders now expected to follow this move.

Abbey has increased the price of all its fixed-rate products by between 0.15% and 0.56%. Abbey cut its fixed rates just two weeks ago.

Woolwich increased its two-year fixed-rate deal from 5.49% to 6.19% while its ten-year fixed rate product went from 5.59% to 5.77%.

Both banks are blaming last week's increase in swap rates - the level at which banks lend to each other - for the increase. They also say they want to control business volumes in a volatile market.