Mixed feelings about rise but fuel bills worry many

Out on the busy streets in London's West End, news of an interest rate rise appeared to have done little to deter shoppers but some at least expressed concerns about how they might be affected.

Maria Farrell, a mother of two who is looking for work, was less than happy. "I'll be on a stricter budget now," she said. "It wouldn't be so bad if wages and benefits rose as well but they are not. I doubt I'll be saving more, not if fuel bills keep rising, which is the biggest problem. At the moment I can't afford to save. But you can't cut down on spending because you need to buy essential items like clothes and food."

For others with more disposable income, the rate rise has less impact. "My husband and I have a fixed interest rate on our mortgage and loans, so it's not going to affect us much," said Toni Gentle, a pensions manager. "We both have quite good jobs and we like to spend; the rate rise isn't going to change that."

Yet as spiralling debt and bankruptcy becomes an increasing problem in Britain, others saw the increase as a smart move by the Bank of England.

Sol Vaid, a financial adviser, said the rise would help prevent more people getting into debt, "which is a big problem here and escalating".

He added: "But I don't think today's rate rise is going to change many people's spending patterns. It won't affect me yet but I'm planning to buy a house soon so it will then. Maybe older people will take it more seriously but young people really don't care and will continue to spend."