TWO thirds of people living in the South West believe their household finances could cope with a rise in the mortgage base rate, according to a new survey.

Loan.co.uk commissioned the study, which asked people how an increase would impact on their monthly budget.

With experts predicting a first rise in the base rate towards the end of the year or in early 2016, 64 per cent of people surveyed said it would only impact their monthly budget a little or not at all.

Thirty-one per cent of people believed a 0.5 per cent rise or more would not affect their monthly budget at all, whilst 33 per cent said it would only impact it a little.

Meanwhile 25 per cent of those surveyed said a first rise from the Bank of England since 2009 would squeeze their disposable income quite a lot, with five per cent admitting it would have a significant impact. Six per cent said they didn’t know.

Nationally, the survey of 2,000 people also found that 65 per cent of people expect the base rate to rise by at least 0.25 per cent in the next 12 months in line with economist’s expectations.

This figure was mirrored in the South West, compared to only eight per cent who believed that there would be no rise. A further 27 per cent of respondents admitted to having no idea.

Paul McGerrigan, chief executive of Loan.co.uk, said: “The Bank of England has told us that when rates eventually do rise, they will do so gradually, which is encouraging.

“If we do see the first rate rise in the next 12 months in line with economic forecasts, it won’t be large and borrowing rates, whether it be for a mortgage or a secured loan, will remain low.”

He added: “The results of the survey show that households recognise that although the base rate can’t stay at 0.5 per cent forever, it appears it won’t rise sharply as in the past.

“This, combined with an increase in disposable income as a result of falling oil prices and the knock on reduction of shop prices, means consumer confidence appears to be higher than it has been for several years.”