Interest Rates May Rise before General Elections: Experts

Bank-of-EnglandAfter the report issued by the Office for National Statistics on Wednesday, experts have suggested that the interest rates may not remain low and may increase before the general elections.

The expectations are made considering the better economic growth and reducing unemployment in the country.

The report revealed that the unemployment reduced by 18,000 from June to August. At present, the number of unemployed people is 2.49 million, while the working population is record high at 29.87 million.

According to this report, the rate of unemployment was stable at 7.7%, but the number of people applying for jobseeker's allowance reduced by 41,700. This figure is the lowest since the beginning of financial crisis.

Observing the overall scenario, Bank of England Governor, Mark Carney has assured that the interest rates will not increase till the time the unemployment rates in the nation come down at 7%. He expected the figure will be reached by 2016.

At present, the interest rates are at 0.5%, amidst the increasing housing prices and equally high inflation.

On contrary to the Governor's views Senior Economist at The Centre for Economics and Business Research said, "By the end of 2014, we expect the headline unemployment rate to stand tantalising close to 7 per cent, raising the prospect of a rise in the base rate of interest ahead of the general election in 2015."