Cameron insists his plan is 'on track' despite potential interest rate rise

Bank of England governor Mark Carney (L) and Prime Minister David Cameron Photo: PA

David Cameron has given his first response to yesterday's suggestion by the Bank of England that interest could go up much sooner than planned.

The increasingly healthy state of the economy led Bank Governor Mark Carney to predict that interest may start to rise in 2014 or 2015.

That is more than a year earlier than previous estimates.

It means interest rates might start to rise before the General Election.

"We have an independent system for system for setting interest rates," Mr Cameron said.

When I asked him that rising interest rates is not exactly Plan A, he replied that Plan A is "on track and doing well".

He added: "The better we execute plan the more were able to keep deficit down and the lower interest rates can be."

That, however, is not entirely right. Because the better the rebound in the jobs market, the sooner interest will start to rise.

And David Cameron has always indicated that higher interest rates would trigger a real "cost of living crisis" for the "hardworking people" he refers to.

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