Paying the price for the recession

It is also a foretaste of things to come if the recent increases in inflation prompt a rise in interest rates just as many families have to re-negotiate the terms of their mortgage because cut-rate offers, which appeared too good to be true, have run their course.

Mervyn King, the Bank of England governor, was accused of undue pessimism earlier this week with his assertion that the patience of households will be "sorely tried" in the years ahead as the UK claws recovery from the recession.

Even he, however, did not expected to be vindicated hours later by Skipton's rate rise which, while good news for savers, has far-reaching consequences for those saddled with large mortgages and debts.

Of course, the building society has sought to placate customers – and downplay fears that it could lose business – by pointing out that its standard variable rate has been historically low and, even factoring in this increase, offers better value than its market rivals.

Mutual building societies have also been placed at a competitive disadvantage as a result of the credit crunch, the state aid handed to banks – and now the prospect of the taxpayer-subsidised RBS using public money to bankroll US company Kraft's controversial takeover of the confectioner Cadburys that threatens to put thousands of British jobs at risk.

Likewise, Northern Rock continues to be the beneficiary of the Government's bailout strategy while, at the same time, having the money to sponsor Newcastle United Football Club and its millionaire players; another case of distorted priorities.

It is unlikely to appease Skipton's customers, and others, facing the most unpalatable of "triple whammies" – increased mortgages, rising inflation and tax hikes to help return the public finances to parity.

Far from being over, as Gordon Brown would contend, this recession is still to run its course, as Skipton's announcement shows.