British interest rates would need to rise to 8.5 per cent for the cost of debt servicing as a proportion of national income to hit levels seen in 1990, when the economy tipped into recession, new research shows.

The study from Alliance and Leicester reveals the economy may be becoming more immune to interest rate changes as Britons cut back on credit card borrowing and increasingly opt for fixed rather than variable-rate mortgages.

The findings have resonance after last week's shock inflation figures prompted a scramble to bet on higher interest rates.

Consumer price inflation leapt in March to its highest since records began while retail price inflation, widely seen as a better gauge of the cost of living, hit its highest since 1991 - a year when interest rates were in double digits and Britain was in recession.

"The vast majority of UK households have very manageable debt levels and very few are living beyond their means," said Chris Rhodes, director of retail banking at Alliance and Leicester.

A recent study commissioned by the Bank of England sounded similarly sanguine. It showed British household debt had doubled since 1999 but that repayment difficulties posed less threat to the broader economy than they did in the 1990s.

Britons are sitting on a debt pile worth more than £1 trillion but the bulk of this is secured against property. Unsecured borrowing has fallen dramatically over the past year.

The growing popularity of fixed-rate mortgages may also shield the economy from the fallout of higher rates. Fixed-rate deals now account for three quarters of all new mortgages, according to the Council of Mortgage Lenders, up from less than half two years ago.

Money markets show British interest rates, currently 5.25 per cent, are likely to reach 5.75 per cent before the end of the year.