Lenders move to up mortgage rates

The bank's standard variable rate will rise from 6.5% to 6.75%, equivalent to a £15 a month increase on a £100,000 repayment mortgage.

Earlier, Northern Rock increased its mortgage rate by 0.25%. Other banks are expected to follow suit soon.

Last week, the Bank of England (BoE) unexpectedly raised UK interest rates by 0.25% to 4.75%.

The BoE's Monetary Policy Committee upped rates to quell inflationary pressure in the UK economy.

But some industry leaders criticised the rate move as premature and warned of potential damage to profits and jobs.

Savers

Halifax's rate rise will come into force on 1 September.

Borrowers who plumped for a tracker mortgage - one which follows the BoE base rate - will see an increase in mortgage rates from 1 September.

The bank pledged to raise rates on its savings accounts at the same time.

In the past, banks and building societies have been criticised by consumer groups for failing to pass on BoE rate rises to savers.

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