Labour said that a potential interest rate rise in advance of the general election will not cost the party votes.

The Bank of England is tipped to increase rates by a quarter point - a move which would add £15 a month to the cost of a £100,000 home loan.

Ed Balls, Gordon Brown’s close ally, said an increase would highlight the strength of the economy.

Speaking at a parliamentary lunch, Balls said: "If the MPC were to judge that a rate rise was justified before the election because of the strength of the economy - and I’m not predicting that they will - I do not believe that this will be a big election issue in Britain or for Labour. This is a big change in our political culture."

Balls also suggested that tax cuts and spending rises could be unveiled in this month's Budget.

Ed Balls said that "I hope more can be done... to support families, pensioners and our [other] priory areas".