What is in store for interest rates?

All eyes are on the Bank's base interest rate at the moment, with mixed views on whether it will stay at the historic low of 0.5 per cent this month.

The Bank of England's base interest rate has stayed at the historic low of 0.5 per cent since March 2009 but now, with the UK moving slowly towards economic recovery, speculation has started about when rates will begin to rise once again.

A number of signs are pointing towards the rate being increased at the Monetary Policy Committee's June meeting, with high inflation levels fuelling fears that the rate will be hiked to prevent the cost of living from spiralling.

Influential think-tank the Organisation for Economic Co-Operation and Development (OECD) has suggested that interest rates will have to rise as high as 3.5 per cent by the end of 2011 to combat inflation.

"The gradual drift up of some measures of inflation expectations implies a need to increase interest rates earlier than previously thought and no later than the last quarter of 2010," it said in its latest Economic Outlook.

"The projected increase of core inflation to the Bank of England target warrants policy rate to 3.5 per cent by the end of 2011."

However, economists remain divided about when the Bank will start to increase interest rates again.

A recent poll of 61 economists conducted by Reuters highlighted that just 20 analysts thought that rates would be hiked this year, compared with 35 last month.

The economist unanimously agreed that the MPC would leave interest rates at 0.5 per cent at its June 10th meeting.

Median forecasts suggest that rates will start to rise in the first quarter of 2010, reaching 0.75 before being hiked to one per cent by mid-June. They suggest that the base interest rate will finish 2011 at two per cent.

Michael Baxter, editor of Investment and Business News, is one expert predicting there will be no change in the base interest rate this month.

"In the last meeting they had just a few doubts. This month's meeting will perhaps see a few more doubters. But for now the majority of movers within the Bank of England will stick with low interest rates for quite a long time yet – certainly until the end of this year," he added.

But how will the base interest rate changes over the coming months affect consumers?

Savers have been keeping a watchful eye over the base interest rate over the past couple of months trying to find the best way to boost their nest eggs.

A recent poll by the Fair Investment Company found that 86 per cent of savers are planning to review their savings accounts given the low interest rates on offer at the moment.

It was also found that more than three-quarters (78 per cent) of people are looking for products that will grow over time, helping them to combat the low interest rates and get the most out of their money.

And one expert has said that people need to consider the possibility of future rate rises when signing up for products such as ISAs.

"You have got to ask yourself the question that if the analysts are predicting interest rate rises, what do they expect those rates to be and how far down the line?" commented Ark Financial Planning director Phil Perry.

He advised that with interest rates likely to remain low for the foreseeable future, savers should look to fixed-rate ISAs, which are currently offering higher rates. However, Mr Perry warned that people should not sign up to products which last longer than two years as interest rates could rise again sooner than this.

While savers have been keeping their fingers crossed for an interest rate rise, mortgage customers have been debating what to do; sign up for a fixed-rate deal or risk a tracker, which will be better in the short term, but could prove more costly if interest rates rise sooner than expected.

A growing number of homeowners on tracker deals are also concerned that if interest rates rise suddenly they may struggle to make their repayments.