MORTGAGE borrowers could be facing yet more misery after last week's interest rates hike - another rise could hit before August.

The 0.25 per cent rise to 5.5 per cent - the fourth since August 2006 - may not be enough to quell rising inflation, warn economists.

Interest rates are now at a six year peak. Another 0.25 per cent rise to 5.75 per cent would take the cost of borrowing to its highest point since February 2001.

The latest rise had been widely expected after Consumer Price Index (CPI) inflation hit 3.1 per cent in March.

Award-winning Dorset mortgage broker Debbie Boyes said: "A quarter of a percentage point rise may not sound much.

"But each quarter of a percentage point rise represents an increase in cost of nearly £21 per month on a £100,000 interest-only mortgage.

"Multiply this by the four rises and borrowers face a significant change in living costs."

"And," she added "thousands of fixed-rate deals are now coming to an end.

"These borrowers may not have really taken much notice of the rises since August, but they could be in for a nasty shock when they suddenly find the amount they are having to pay is shooting up."

Investec Securities economist Philip Shaw said: "The quarter-point increase comes against a background of rising inflationary pressure.

"We expect a further increase to come, to take base rates to 5.75 per cent."

Institute of Directors senior economist Peter Patterson said: "Underlying inflationary pressures have been rising for some time, and the Bank of England's priority must be to get on top of these as quickly as possible."

But British Chambers of Commerce economic adviser David Kern warned against back-to-back rate hikes.

"At this stage, calls in some quarters for further Bank rate increases in the near future are misguided and potentially dangerous.

"There are powerful arguments for the Bank of England monetary policy committee to wait before raising rates again, to avoid damaging the economy unnecessarily."