AFTER an extended period with very little movement, interest rates are expected to rise next month.

The Bank of England’s Monetary Policy Committee left the base rate on hold at 0.5 per cent in March, but experts are predicting an increase sooner rather than later.

Ed Monk, associate director for personal investing at Fidelity International, said: “The message from the Bank of England couldn’t really be clearer: get ready for higher rates now.

“Two members voted for a rate rise last month and the Bank said nothing to dispel expectations that rates will rise in May.”

A rate rise is potentially good news for savers. However, there is no guarantee that savings rates will follow any rise in the base rate.

Anna Bowes, director at Savings Champion, an independent savings advice site, said “The average rate on an easy access account is 0.42%, up by just 0.07 percentage points since September 2017, even though the base rate has risen by 0.25 percentage points in that time.

“If we look back five years, when the base rate was at 0.5%, the average rate was 0.74%, so higher than today’s rate.”

But it is not all doom and gloom. Competition has been hotting up over the past year and the rates on best-buy accounts have been increasing steadily. Bowes therefore recommended that savers act now.

“Don’t wait for a base rate increase but switch now to a better account,” she said. “If you are in one of the rock bottom accounts paying 0.10% or less, by switching today to the best-buy easy access account, you could increase the interest you are earning by at least 1.25 percentage points – five times a base-rate rise of 0.25 percentage points.”

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Savers can earn higher interest in fixed rate accounts. For example, you can earn around 1.35% in a top easy-access account, compared to 2.61% in a five-year fixed-rate deal. But does it make sense to fix your savings rate now if the base rate is set to rise?

Rachel Thrussell of Moneyfacts, the financial data provider, said: “The fixed-rate savings market is quite volatile at the moment, so if you see a good rate, it might be wise to take advantage.

“Most people are opting for shorter term fixes because of the market uncertainty, as well as pressure on household finances.”

Whether you fix for a longer or shorter term, it is probably better than sticking with an easy access account.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Whatever you do, make sure you make an active choice to pick the account that works for your needs, because allowing indecision and uncertainty to restrict you to easy access for your whole savings portfolio means missing out on some rates that are getting more attractive by the day.

“The most sensible approach is to avoid gambling on rate rises. Instead savers should decide the right length of time to fix for their own circumstances, and then do so at the best available rate today.”

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An increase in the base rate is likely to benefit savers it is potentially bad news for borrowers.

David Hollingworth of brokerage L&C Mortgages said: “Mortgage rates have been nudging up as a result of the November rise in the base rate and the trend has continued as the expectation of higher rates pushes up lenders' funding costs.”

For example, the lowest two-year fixed rate is now 1.24%, compared with 1% last year.

Hollingworth said: “The clear message to borrowers who are nervous about the impact of another rate rise or two this year is to take action now. It's not too late to get hold of a great rate, but those who put off the decision are likely to kick themselves.

“Locking into a fixed rate should still offer good savings over a standard variable rate and also protect against any future rate rises.”

Sainsbury's Bank offers one of the best deals - a five-year fix at 1.74%, with a minimum 40% deposit and a £995 fee. The mortgage can be fixed for as long as 10 years, but you have to consider the risk that rates will move against you during the fixed term.

If you are already tied into a fixed rate and do not want to pay the early exit fee, many lenders allow you to reserve a rate for up to six months. So, you can still grab a good deal now and switch when your current fix expires.