We all know it won’t happen. Gordon Brown will change the rules, but his beloved golden rule, as it is currently defined will be broken over the next economic cycle says the National Institute of Economic and Social Research.

The NIESR report, which is published every quarter, also reckons that UK plc is set to settle down to a growth rate of 2.5 percent this year, and 2.7 percent next, but with inflation expected to stay above target for the next few months, it has predicted that the rate of interest will not only jump to 5 percent, as every one else believes, but will then jump again to 5 .25 percent. Beyond that, says NIESR, there is unlikely to be room for more than a very small eventual reduction in interest rates, and it predicts rates will stay at or above 5 per cent per annum.

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