TSB has ambitions to steal business from its bigger rivals.

The bank, which today announced a fall in half-year profits, is furiously writing mortgages.

The economy is on the up, but Bank of England is repeatedly signalling that interest rates maybe too.

The chief executive, Paul Pester, is undeterred. TSB's mortgage book has been stress-tested. He believes it's resilient.

We test every new customer that comes to us. We test that they can afford to pay the mortgages when interest rates are at 7% so that's way above the current level of 0.5%.

TSB boss Paul Pester

Mr Pester believes that Britain is ready for interest rate rises.

"The key thing I remember is for a £100,000 mortgage a 0.25% interest rate rise means about an extra £20 a month for mortgage customers, so an extra £5 a week.

"What I'm saying to my customers is try to find a way now to start thinking where you're going to get that extra £5 a week from".

The Bank of England knows that when interest rates rise, some people will struggle.

The Bank of England has been warning of rate rises for a while. Credit: ITV News

Mortgages in the UK


Of these are new mortgages


Of mortgages are variable so will be affected

1 in 8

Households could struggle financially if the interest rises

There are 11.2 million mortgages in the UK - almost to thirds are variable rate mortgages.

So when Bank Rate does go up, the impact will be felt be a lot of people very quickly.

At the end of last year, the Bank published research which forecast that if interest rates were to rise by 2% and incomes remained unchanged.

Then 1 in 8 households would have have to either significantly curtail spending or find ways of earning more.

That research is almost a year old. Since then the outlook has brightened and income has picked up, but there are still some who believe quite modest rate rises will cause significant hardship.

The Bank of England has been around for 320 years. Interest rates have never been this low for this long.

A consensus is building that raising Bank Rate is the right thing to do.

Nearly two thirds of UK mortgages are variable rate so will be affected. Credit: ITV News

A year ago when the Bank first signalled that an era of abnormally low interest rates was coming to an end, business groups complained.

Traditionally the likes of the CBI and the BCC routinely lobby to keep borrowing costs low - but no longer.

Simon Walker of the Institutue of Directors argues that change is now both necessary and inevitable.

"An interest rate of virtually zero can't be normal because there needs to be some cost of holding money over a period of time.

"That's essential to running an economy efficiently. We've got to get back to a situation where 2, 3 even 4% interest rates become the sort of thing that businesses can cope with in order to stand up when the next shock comes".

TSB says it's ready for higher interest rates. Are you?

A "return to normal" sounds a welcome prospect, but know one knows what will happen next.