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Interest rates 'to rise in early 2015'

12 May 2014

One of the UK’s leading business groups has predicted that interest rates will rise to 0.75% in the first quarter of next year.

According to the Confederation of British Industry (CBI), interest rates are likely to rise from their current level of 0.5% to 0.75% in the first three months of 2015, rather than in the third quarter as previously predicted by the organisation.

The CBI has also revised upwards its forecasts for economic growth, anticipating growth of 3% for 2014 and 2.7% for 2015.

However, despite reporting increased levels of confidence and business investment across all areas of the economy, the business group has urged political parties to ensure that the positive economic message does not become buried in the run-up to the election.

CBI director-general John Cridland warned, ‘Politicians must be wary of the risk of headline-grabbing policies that weaken investment, opportunity and jobs’.

The CBI’s upgraded forecasts follow a recent report from the National Institute of Economic and Social Research (NIESR), which suggests that the UK economy is nearing pre-financial crisis levels.