Still, a sizable numbers of analysts and market participants believe the RBI could hold off and not hike interest rates, noting that the recovery is nascent and bank credit to corporates is not yet free flowing.
The one reason that may have prompted the RBI to hike interest rates is the core inflation, which has been on a upsurge.
"Since the RBI is committed to bringing down inflation, they don't have a choice but to raise rates", said Rupa Rege Nitsure, group chief economist at L&T Finance Holdings. If interest rates are 1% or more by the time the economy sails into stormier seas, policymakers will at least be able to cut rates a couple of times before cranking up the printing presses for more QE. This the first time since October 2013 that the central bank has hiked borrowing costs at two consecutive policy meetings.
While Repo rate is the rate at which the central bank lends money to the banks, the reverse repo rate is the rate at which banks lend money to the RBI.
What does the interest rate rise mean for me?
A CARE Ratings report says banks react faster on lending rates, compared with deposit rates, in a rising interest rate scenario.
HSBC - Tracker mortgages will go up on Friday in line with the base rate.
With less than eight months until Britain quits the European Union, the government has yet to agree a divorce deal with Brussels and has stepped up planning for the possibility of leaving the bloc without any formal agreement.
Worth mentioning here is that retail inflation, which is factored in by the MPC, soared to a five-month high of 5 per cent in June on elevated fuel price.
"Weather effects - both the snow-related disruption in February and March and the unseasonably warm weather and long sunshine hours in May and June - seemed to have accounted for around half of the second quarter rise", it added.
But Mr Carney and the MPC have been careful to stress repeatedly that any rises will be "gradual" and "limited" and not see rates increase to the high levels seen in the past.
Pushed on what no deal would mean, he said "disruption to trade as we know it", before adding: "As a effect of that, a disruption to the level of economic activity, higher prices for a period of time". An annuity, which guarantees an income for life, rises in value alongside any interest rate rise.
While deals directly tied to the base rate will change, several providers have said they are still mulling over how they plan to apply the base rate increase to other products - leaving many savers holding their breath.
The BoE said it expected Britain's economy would grow by 1.4 percent this year, unchanged from its forecast in May, but it nudged up its forecast for growth in 2019 to 1.8 percent from a previous projection of 1.7 percent. The mistake they made was cutting rates in response to the Brexit vote.