Santander for Intermediaries says its tracker and standard variable rates will rise by 25 basis points, following the interest rate hike by the Bank of England yesterday.

The high street bank says all tracker mortgages linked to the base rate will automatically change from the beginning of March, including its follow-on rate, which lifts to 3.75% from 3.50%.

It adds that Santander and Alliance & Leicester standard variable rates will also rise by 25bps to 4.74% from 4.49% from the beginning of March.

The lender says: “If a customer’s existing Santander mortgage is affected, they’ll receive a letter notifying them of their new interest rate and new monthly payment a minimum of five days before their monthly payment changes.”

All tracker rates and reversionary rates on its new business and internal transfer tracker products will increase in line with the base rate on Tuesday 8 February, the banks adds.

The move comes after the Bank of England’s Monetary Policy Committee lifted its base rate to 0.5% from 0.25%, to combat rising inflation.

Inflation is currently at 5.4%, driven by rising gas and electricity costs, well above the Bank’s 2% target.

The Bank added it expects consumer prices index living costs to peak at 7.25% in April, which is around 2% higher than it forecast in its November Report.

This latest rise from the central bank follows an unexpected hike in December, where the base rate moved from a historic low of 0.1% to 0.25%.

Earlier this week, a Nationwide monthly survey showed that house prices jumped by 11.2% on an annual basis in January.

The mutual said this was the strongest start to a year since 2005 and it lifts the average price of a house across the UK to £255,556.

On a monthly basis, the building society’s report shows that house prices increased by 0.8% last month.