Shadow chancellor warns of interest rate rises

Ed Balls speaking in Bedford

Homeowners are facing a "real risk" of premature interest rate rises, shadow chancellor Ed Balls warned today, as he branded David Cameron the "you've never had it so good" Prime Minister.

Mr Balls, speaking in Bedford, accused Mr Cameron and Chancellor George Osborne of complacency over economic recovery, and warned that their failure to build more homes might force the Bank of England to accelerate interest rate rises.

Ed Balls speaking in Bedford

Despite the loudly acclaimed return of UK GDP to pre-crash levels last week, most people remain worse off under the coalition after the biggest real-terms fall in wages for more than a century, he said.

And he claimed Conservatives were planning "another tax cut for millionaires" if they win next year's general election, after Mr Cameron's policy guru Oliver Letwin was recorded suggesting that a discussion on flat-rate taxes "will no doubt open up" when the public finances improve. A flat rate for income tax could force the 20p basic rate paid by millions of ordinary workers as high as 31p, he warned.

Ed Balls speaking in Bedford

Speaking in Bedford, where Harold Macmillan famously declared that "most of our people have never had it so good", Mr Balls said that the recovery produced by Mr Cameron was far from the boom which Britain enjoyed under the earlier Conservative PM.

Here is our business correspondent Matthew Hudson's interview with Mr Balls after his speech: