A RISE in interest rates is likely after three surveys showed the pace of economic recovery was accelerating.

Economists said the Bank of England was almost certain to increase interest rates to 4.25 per cent tomorrow, with further rises likely.

Anxiety about record levels of consumer debt will have risen after the bank said that net mortgage lending rose by £9.34bn in March.

This was accompanied by a £963m increase in borrowing on credit cards, leaving consumers collectively owing £54.03bn on their plastic.

Retailers reported sales ahead last month after a strong Easter.

Half the companies polled in the Confederation of British Industry's (CBI) monthly Distributive Trades Survey (DTS) said sales grew during the month, compared with 21 per cent which saw a fall.

John Longworth, chairman of the DTS panel, said: "If this continues, interest rates will have to increase to a more neutral level later this year."

Manufacturing growth also accelerated last month on the back of higher productivity and strong international demand.

The closely-watched CIPS Purchasing Managers' Index, which draws together data from a series of separate indices to measure overall activity, stood at 55.1 last month against 53.7 in March.

HSBC economist John Butler said the figures showed consumers' appetite for debt remained as high as ever and that UK manufacturers were becoming more optimistic about a recovery.

He said: "This suggests a 0.25 per cent rate hike tomorrow and suggests there are more to come. We still believe rates will be back at five per cent by the end of this year."