The C&G were the first to react

Millions Wait on Cost of Home Loans

The Cheltenham & Gloucester were the first major lender to raise their rates in response. The C&G, the UK's fourth largest lender with 600,000 borrowers, put their mortgage rate up from 8.2% to 8.45%.

Other major lenders such as the Halifax and Abbey National said they would review the situation before making a decision to follow the C&G.

With four rate rises in as many months, a typical Halifax or Abbey borrower with a £50,000 repayment mortgage has already seen their monthly bill increase by around £26 since the start of May.

For someone with a £50,000 interest-only mortgage the increase has been even bigger - around £33.

The new rate for the C&G will take effect from August 11.

The Halifax, Britain's biggest mortgage lender with 2.5 million borrowers, offered homeowners a sliver of hope by saying: "We are reviewing the situation at the moment. We don't intend to make any immediate announcement."

The Woolwich said it was keeping an eye on the market and would not make an announcement until Friday at the earliest.

The Nationwide said it was keen to gauge market reaction over the next few days, but added it was determined to remain competitive.

A spokesman for Alliance & Leicester said: "We are reviewing. At the moment we have not made a decision on what we will do."

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