British families would struggle if interest rates rose to 2pc or more, as soaring mortgage debts have accumulated during years of rock-bottom borrowing costs, the Bank of England has warned.

The vast majority of households can comfortably afford their loans at the current base rate of 0.5pc, the Bank's Financial Policy Committee said, with indications of financial strain substantially below those seen just before the financial crisis.

Mark Carney and his colleagues increased the base rate from 0.25pc to 0.5pc in November and are expected to move to 0.75pc in May.