Earlier this week, the Bank of England announced that inflation had reached 3.1 per cent during the course of March, a rise from 2.8 per cent in the previous month.

Although this may not seem to be such a significant increase at first, the effects it may have on personal loan borrowers could be far reaching.

As this is the first time interest rates have surpassed the three per cent barrier for over a decade, Mervyn King, governor of the Bank of England, has been required to write a letter to Gordon Brown explaining why this has happened.

Despite Mr King claiming several weeks ago that inflation rates are likely to increase to curb rising house prices, the announcement has been met with shock by a number of industry analysts.

Chief economist at Abbey Barry Naisbitt claimed that the announcement was an "unpleasant surprise" and that market predictions of a base rate rise are now only more likely to happen following the inflation report.

He added: "Certainly, financial markets have now firmed up their view of another base rate rise next month."

Due to the inflation increase, experts are now certain the Bank of England’s monetary policy committee (MPC) will raise the base rate of borrowing next month.

As a result the cost of secured loan and other forms of borrowing will rise, which could put increased pressure on borrowers’ debt management and ability to make home loan repayments.

Royal London Asset Management economist Ian Kernohan added that while the inflation increase was a "major shock", the MPC is certain to raise interest rates not only next month but at least one further time before the end of 2007.

Meanwhile, Howard Archer, chief UK and European economist at Global Insight, claimed the "thoroughly nasty set of data" essentially guarantees that the MPC will increase the base rate by 0.25 percentage points to 5.5 per cent next month.

Before this week’s news, analysts had already been predicting an increase in May was on the cards as the MPC judged the effect of three interest rises since August 2006.

Although any changes to the base rate would have varying effects for consumers’ ability to make loan repayments, a study by the Guardian reported a quarter percentage rise would add about £15 per month, £170 over the course of a year, to a typical 25-year variable rate £100,000 mortgage.

However, those wishing to maintain a steady rate of mortgage payments for the coming months may wish to consider taking out a fixed-rate secured loan.

Head of financial planning for SG Hambros Christine Ross reported that fixing interest rates could be particularly beneficial to first-time buyers or for those who may find their finances tightened after moving into a new property.

She told BBC Radio Five Live’s Wake Up To Money programme: "Fixed rates are not just about beating the market. It’s about certainty. It’s about not getting turned out of your house at the end of the day."

She added that consumers should also take time to shop around for the right deal for them.

Ms Ross reported that a fixed-rate secured loan could be a particularly wise option for first-time buyers or consumers "who are stretching themselves by moving to a larger house".

Meanwhile, the inflation announcement is also likely to come as a blow to older people and low-income families.

Findings by the Alliance Trust Research Centre indicated that the over-75s and households with an annual income of less than £7,000 faced an inflation rate of 4.7 and 4.3 per cent respectively.

Head of the centre Shona Dobbie suggested these groups are likely to face further difficulties with debt management and personal loan payments as a rising proportion of their income is spent on essentials such as utility bills and food.

As a result, with at least one interest rate rise predicted before the end of the summer, those looking for a competitively priced loan to either make home loan repayments or consolidate their debts could be advised to act now or see their debt management problems worsen in the not so distant future.

Interfinancial providing you with breaking personal loan news.