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Last Updated: Friday, 12 January 2007, 13:14 GMT
Nationwide first to raise rates
Nationwide branch
Interest rates will rise on 1 February for Nationwide customers
The Nationwide building society has become the first major lender to respond to yesterday's surprise rise in interest rates by the Bank of England.

From 1 February, the lender will raise its savings and mortgage lending rates by a quarter of a percentage point.

This will affect all Nationwide's variable rate policies and accounts.

Nationwide's base variable-mortgage rate will go up to 6.74%, and its tracker mortgage rates will also rise, along with variable savings rates.

On Thursday, the Bank of England raised their main interest rate by a quarter point from 5% to 5.25%.

"We are pleased to be able to act quickly to make it clear to our members how they are going to be affected following the increase in the Bank of England Base Rate," said Stuart Bernau of the Nationwide.

A swift move from such a major lender makes it highly likely that other banks and building societies will raise their rates soon as well, analysts said.

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