Case studies: Interest rate rise fears

British consumers have been enjoying the cheapest borrowing for nearly half a century.

But the Bank of England has now raised its base rate to 3.75%, up a quarter of a percentage point from its lowest level for 48 years.

BBC News Online spoke to three people for their views. Could they ride out the increase?

Daniel Yates, a first-time buyer and new father

Sally Dolden, moved fast to head-off rate rise

Andrew and Samantha Davies, say no to house move

Carolyn Appleton may cut her spending

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Daniel Yates, 31, a data manager for an information company, is a first-time buyer who lives in Enfield, north London, and has a young family

Mr Yates took the plunge into the London housing market last summer - and recently became a father.

He bought his first property, a two-bedroom Victorian cottage in Enfield, with his wife Aoife.

HOW WILL IT AFFECT YOU?

The payment on a £100,000 mortgage will rise by £14 a month. Find out more

At-a-glance

They had budgeted for a rate rise, but now their financial planning has been unsettled.

Three weeks ago, their new baby daughter Dervla was born - and his wife, an administrator, is now on maternity leave.

The couple took out a discount mortgage, and have therefore made the most of interest rate reductions over the last year.

We could be in trouble if rates rise by 1% Daniel Yates

But, with the new baby and the cut in income coming in, they are worried about any possible rise.

Mr Yates says a rise of more than half a percentage point could cause deep financial problems.

"A quarter percent increase will not kill us, but I would be more worried that we were now heading in a direction of upward interest rates."

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Carolyn Appleton, 35, an occupational therapist, has just bought a home in St Helens, Merseyside.

Ms Appleton bought her £165,000 three bedroom property with the help of a discounted mortgage.

Unfortunately, Ms Appleton's discount period is now coming to an end - just in time for any rate rise to hit home.

However, Ms Appleton is not too worried: "I think I will be fine, unless rates go up to silly levels like a decade ago. I will just have to cut my spending if rates increase."

Ms Appleton has avoided credit card debt but fears for people who find themselves in the red at a time when a rate rise looks on the cards.

"I think credit spending has gone way too far in the UK. I am a bank's nightmare as I pay off my debt each month," she said.

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Sally Dolden, 44, a housewife from Rochester, Kent, has taken steps to protect herself from the impact of a rate rise.

A few weeks ago, believing that interest rates would soon be on the rise, Ms Dolden decided to move her £163,500 mortgage to a fixed rate provider.

Many people have simply borrowed too much Sally Dolden

As result, the Bank of England rate rise will not hit her.

"I was getting increasingly worried that rates could rocket and I would not have been happy, or comfortable, paying 7 or 8% interest," she said.

Ms Dolden hopes that when her fixed rate period ends, interest rates will have returned to a low level.

Like millions of Britons, Ms Dolden has had her fingers burnt by a sudden rise in interest rates in the past.

"I remember the early nineties when rates shot up and I was left in negative equity. My fear is that this time it is going to be a lot worse... many people have simply borrowed too much."

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Andrew Davies, 33, a production manager from south east London and his wife Samantha Davies, 37, have a young family

Mr Davies has read the interest rate runes and recently fixed his £160,000 mortgage for two years.

The temptation is always there to stretch ourselves but we have decided to wait and see which way the housing market goes Andrew Davies

As a result Mr Davies is protected from the rate rise, particularly as he owes less than £600 on his credit cards.

But with his wife at home looking after their two children, Mr Davies is the sole earner.

"My main worry is that an interest rate rise could hurt the economy and put my job at risk," he said.

But the rise in house prices does provide the Davies' with a fallback position.

"We are confident that we will not slip into negative equity, the value of our house has more than doubled since we bought it," Mr Davies told BBC News Online.

However, the Davies' have put on ice the plans they had to take their next step on the property ladder.

"The temptation is always there to stretch ourselves but we have decided to wait and see which way the housing market goes following any rate rise. Perhaps when Samantha returns to work we may decide to take the plunge," Mr Davies said.