The interest rate rise is mixed news for consumers

BBC News explains how this latest rate rise will affect your personal finances.

I have a big mortgage, is it time to hit the panic button?

The quarter of a percentage point rise alone is unlikely to push your finances over the edge.

Interest rates are still low by the standards of the past 20 years, even if the trend has been mainly upwards since late 2003.

In addition, in recent years more Britons have chosen mortgages where the interest rate is fixed for several years instead of variable rate deals, which are very susceptible to Bank of England base rates moves.

As a result, the large numbers of people with fixed-rate deals will be unaffected by the Bank's rate rise.

HOW RATES HAVE CHANGED What the changes mean for you At-a-glance

However, people with other types of mortgages - or whose fixed-rate period is coming to an end - are likely to face higher payments.

According to the Halifax, each quarter of a percentage point rise adds nearly £20 to the monthly repayment on a £100,000 variable rate repayment mortgage - quite a substantial hit.

Interestingly, the Royal Institution of Chartered Surveyors (RICS) called for this rise in interest rates, hoping that it would dampen the UK housing market a little.

During 2006 UK house prices have been rising at a faster pace than nearly all analysts forecasts.

I'm a saver. Is this good news?

It all depends on how much of the interest rate rise banks and building societies decide to pass on to savers.

In the past some banks and building societies have been accused of dragging their feet and not passing on the rate rise quickly enough.

In general, though, rate rises are good news for savers.

Pensioners and those buying an annuity - an income for life - may also be cheered. In the past they have had to make do with low rates of return.

But before savers start popping the champagne corks, they should remember that interest rates are still relatively low.

In addition, far too many investors keep their savings in accounts that pay poor rates of interest, which actually lose them money once tax and inflation is factored in.

Financial experts are urging savers to be active and switch accounts to ensure they get the benefit of recent interest rate rises.

Is this the last rate rise, or is there more pain ahead for mortgage holders?

No one can say for certain whether or not there are further rate rises on the way.

However, many economists expect that UK rates will go up again early in 2007.

The Bank of England's main objective in raising rates is the control of inflation.

There is a pattern emerging in the world economy of rates rising as countries try to curtail inflation, which has been stoked in part by high oil and energy prices.

What about me? I have several credit cards - all near their spending limit

Credit card rates are often high but are less sensitive to Bank of England base rate movements than mortgages.

The rate rise may not feed through to credit card borrowers at all, particularly as the market place is competitive.

However, as interest rates rise, lenders tend to get twitchy about whether borrowers can afford to repay debts in the future.

In the early 1990s, the banks were accused of making an economic recession and a house price crash far worse by pulling the rug from under borrowers.

Many people found their credit card debt was called in at short notice and, as a result, got into financial hot water.

I have taken out a loan secured against my property. Am I going to regret it?

Many homeowners - seeing the value of their property rocket in recent years - have been tempted to remortgage to capitalise on rising house prices.

In addition, some people have consolidated debts such as credit cards and personal loans into a loan which is secured against their homes.

If they are unable to keep up payments they could risk losing their homes.

Any interest rate rise will hit homeowners who have remortgaged with a double whammy - first on their main mortgage, then again on the second one.

What can I do to protect myself?

First, don't panic.

No major UK economists are predicting that a recession is around the corner.

In addition, even with the quarter point rise, interest rates are roughly half the average of the past 20 years.

But some debt experts hope that the interest rate rise will act as a wake-up call to UK borrowers to get their finances under control.

On Tuesday, charity Citizens Advice said it had dealt with 1.4m debt enquiries during the past year.

This represents a doubling of debt enquiries since 1997.

If you are looking to protect yourself, financial experts advise that you have at least three months salary in a deposit savings account.