A couple of areas like house builders and the high street could take a hit. As mortgage repayments rise and consumers possibly need to tighten their belts, less money could be spent. Let’s not forget there is a generation of mortgage holders out there who have never experienced real rate rises.

Conversely, insurers and banks may benefit slightly, as could brokers if market volatility increases.

Slightly longer-term, if inflation becomes more entrenched but central banks find it harder to raise rates, the long-end of the yield curve could rise even if the short-end stays low. This inversion would be negative for quality growth stocks.

Value funds that could benefit from the rate rise

Investec UK Special Situations

Alastair Mundy has a well-earned reputation as one of the most disciplined and successful contrarians operating in the UK market today. His approach tends to be especially successful during turning points in investor sentiment when investment fashions change. He seeks to exploit the ‘herd’ mentality of capital markets by investing in UK companies that are both unloved and undervalued and the fund is currently overweight the UK banking sector.

Schroder Recovery

This quietly aggressive, value-driven fund has been run by the same lead managers since 2006, with a continuity of process and a very consistent track record. It invests in companies valued at less than their true worth and waiting for a correction. Recovery investors need a hard head and an open mind – being contrarian can be bruising but very profitable, as the long-term returns of this fund have shown. This fund is also overweight financials.

R&M UK Recovery

Finding undervalued companies that are yet to deliver on their potential is the aim of this fund. The manager uses his three decades of investing experience to identify companies where he believes management have the capability to turn things around. We like that he looks to add to his holdings at almost fire-sale prices in volatile times, which further increases the possibility of long-term capital appreciation. The fund is overweight financials and has five bank stocks in the top ten holdings.

Darius McDermott is managing director of FundCalibre