Bank of England governor Mark Carney has warned the first hike from the historic low of 0.5 per cent could come sooner than expected.
The move will spell higher repayments on many mortgages linked to the Bank rate.
However, it will relieve hard-pressed savers who have been squeezed by it being left at 0.5 per cent for more than five years.
Earlier this year, Mr Carney exclusively told The Northern Echo rates could increase ahead of the next General Election, but added he wanted to see more jobs created in the North-East before he would intervene.
He said: "There's already speculation about the exact timing of the first rate hike and the decision is becoming more balanced.
"It could happen sooner than markets expect."
He pointed to growth being much stronger and unemployment falling much more quickly than had been expected.
When asked about increases in the rate byThe Northern Echo, Mr Carney acknowledged it would be unpopular with mortgage payers.
He added: "We will take the decision when we need to.
"When you raise interest rates, it is a welcome sign.
"I'm not sure we will get a lot of cards or letters to thank us, but we will do it when it needs to happen."