High inflation figures has forced the Bank of England to increase Lending rate the second time in three months. No doubt, the happy beneficiaries are savers, banks, home loan lending and credit card providers. For assiduous savers, the previous lousy rates has just gotten very attractive particularly those with index-linked accounts such as ISAs or TESSAs. For banks, they feel justified in increasing their lending rates even further. For credit lenders, time to rub their hands in glee as they raise their already extortionate rates. For changing rate mortgage or loan holders, well the game just got a bit more expensive.

Give or take, a huge section of the population may not like a increase in interest rates, but higher rate taxpayers can now enjoy the equivalent of 9.25% per annum which is 4% more than normal investment accounts. For base rate taxpayers, this figure is around the 6.5% mark. Returns from fixed-rate bonds is also increasing. Birmingham Midshires, has now launched a one-year fixed rate bond which will pay 6.05% gross. This is better than some of the best margins offered on normal products which stands at around 5.5% on average and 5.9% at best. With extra interest rate increaseexpected this year, savers are bound to reap even more bumper harvest, as there is likely to be more products with 6% or more as rate of return. Keeping money in the bank, in tax-free, index-linked accounts means you can to save a certain fixed amount every year. Coming with the tax-free tag makes it a definite winner for any serious would-be investor.

While rate hikes may be have a brighter side, it is more of bad news than positive news for the average credit consumer. Already, some retail shops have suffered over the Holiday period as the consumer reigned in due to higher bills and expenses overall. Bankruptcies have also increased as inflation rates combined with a myriad of factors have forced small businesses out of the market. Business receivership is dwarfed by the number of individual insolvencies. Ending up broke can be very trying both for businesses and individuals. Even when the ordeal seems to be all over, one realises that a record of it is available on your credit history for 7 years or more. During this period, any loan is likely to come with a high APR. Even low interest credit cards can prove elusive.

If you are finding it difficult, you may realise that, making small but important changes can help improve credit history after lending rate rises. If you are on a variable rate for your mortgage for example, it is adviceable to move to a fixed rate. Bear in mind that you may have to pay for chaning. Some creditors will charge you a certain percentage of your total borrowing for opting out of your contract, whereas some may not charge anything at all. Other charges include arrangment fees which can be anything from 150.00 to 1000.00. You can also obtain a higher credit rating by paying bills on time whether it is credit cards or energy bills as well as home loans.

To end this, while interest rates increase may be advantageous to savers, generally they affect borrowers in a negative way and the consequences can echo in future months and years, both in people's personal lives and businesses.