UK interest rates will remain at their record low of 0.5 per cent for the next few years as it will help in bolstering UK’s battered economy.

As per a report prepared by the Centre for Economics & Business Research, key interest rates will remain at 0.5 per cent until 2011 and will not touch 2 per cent level until 2014.

But, the think tank, CEBR, said all that would lead to tax increases plus cuts in spending.

The CEBR said the next government will have to generate about £100 billion in tax rises plus via making cuts in spending to counterbalance UK's deficit.

The report forecast that if Conservatives come to power, they will hack spending by £80 billion.

The pound is also expected to fall below parity with the Euro.

In addition, the report predicted that the Bank of England would raise its quantitative easing programme by additional £75 billion.