Sue Jameson on the economic forecast
The Bank of England sets out its economic forecast for the UK economy today - experts predicting interest rate rise before 2015's general election or possibly even during 2014.
Read more in Sue Jameson's blog here...
George Osborne is proud the economy is recovering. He's not doing a happy dance because that would be a bit premature and he wants to show how happy he is much nearer the General Election in a years time.
However, that happy dance may have a few unexpected steps in it after we hear from the Bank of England boss Mark Carney later today. Could it be that we will see the first interest rate rise since 2007 BEFORE May 7th polling day?
And the Bank of England is independent so there are no cosy Treasury chats over a nice cup of coffee to influence the decision. It's made purely on economic factors. While an interest rate rise is a measure of success and a return to normal, the very words will cause a flutter economically and politically.
Mark Carney had previously said that a rise from the 0.50 rate wouldn't even be considered before unemployment fell to 7%. As that hurdle was approached with a fairly easy stride and jumped over, Mr Carney said other factors to do with growth and room to grow would also be part of the decision making.
But with growth now forecast to be a whopping 3.4% this year (and compared to the slug like zero percent or lower, that IS whopping) and with more jobs being created, the pressure is on to give growth a further boost by increasing those rates while at the same time keeping the confidence and stability on which Mr Carney is insistent.
I can hear homeowners with big mortgages and lots of baked beans in the cupboard to sustain them giving an anxious gulp at this point! Though a rate rise would benefit savers and investors, it would mean mortgage rates going up too. It also usually means inflation rising for obvious reasons.
So today, expect. Mark Carney to be cautious; to say the economy hasn't fully recovered, it's fragile and needs extremely careful handling and also that if there IS a rise within the next year, it will be very low and very slow.
Think snail rather than happy puppy here. Gone are the rates of 5% for this whole decade at least, but a rise of any sort before the election will not be what the Chancellor really wants as a politician, even if, as an economist, he can see all the plus points in neon.
Don't panic yet and keep those baked beans for a rainier day...
Catch up on the last seven days of Good Morning Britain with ITV Player