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HSBC is the first major institution to suggest the Bank of England will not raise interest rates next year at all - but it insists this is unlikely to boost the sluggish housing market.

HSBC economists lowered their 2015 UK growth forecasts from 2.6 per cent to 2.4 per cent - lower than the Bank of England's own forecasts, as a result of David Cameron's shrill warning that international economies may still be in difficulties.

One major cause of uncertainty - effectively holding back the UK economy and so making the case for no change in interest rates - is the volatile politics leading to the general election in May.

There is the possibility of various alliances or coalitions, which could lead to vastly different economic policies, said Simon Wells, chief UK economist at HSBC.

One big uncertainty would be a referendum on EU membership, Wells added, which could stifle investment programmes until that vote was held, probably in 2017.

However, HSBC says that signs of a cooling housing market will act as a deterrent to prices rising unsustainably as a result of the continued low borrowing costs.

The BoE has kept UK interest rates at a record low of 0.5 per cent since 2009.


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