Homeowners could face an early rise in interest rates if Ed Miliband is propped up in Downing Street by the SNP , a major bank warned last night . US giant Morgan Stanley said the prospect of a Labour government reliant on the Scottish Nationalists would create the ‘ greatest uncertainty ’ of any election result . Its inevitable ‘ anti-austerity ’ agenda could lead to an ‘ earlier bank rate hike than was previously the case ’ , the bank argued . US giant Morgan Stanley said the prospect of a Labour government reliant on the Scottish Nationalists would create the ‘ greatest uncertainty ’ of any election result . Last night , a second major bank , Goldman Sachs , also raised concerns about the same outcome on May 7 . Goldman said Labour would be ‘ dragged to the Left ’ by the SNP , which would result in even more money going north of the border ‘ at the expense of the UK as a whole ’ . It warned that Labour would be then expected to abandon its pledge to manage the public finances carefully . The reports are a double blow to Labour ’ s attempts to convince voters that the economy would be in safe hands with a Mr Miliband-led government . In an election research note , Morgan Stanley said that a Labour-led government reliant on the ‘ anti-austerity and separatist SNP ’ would lead investors to predict a ‘ substantially looser fiscal policy ’ . Goldman also warned in a note to investors that a ‘ Leftward shift ’ could cause share prices to fall in UK firms – particularly those hit by tougher regulation and higher taxes such as banks and energy companies . Nicola Sturgeon 's ( left ) Scottish National Party would drag Ed Miliband ( right ) and the Labour party into its anti-austerity agenda , Goldman Sachs warned last night . By contrast , it said the Conservative-led coalition ‘ has established some credibility in markets as a consequence of its contribution to the stabilisation of the economy and revival of growth that has been achieved since 2010. ’ As a result ‘ it is likely that business sentiment would be supported by the emergence of a Conservative government ’ . Goldman also pointed out that whoever wins the election will inevitably be hit by ‘ financial shocks ’ in the coming years . ‘ Given the mixed record of Labour administrations at dealing with such challenges in the past , the business community may be sceptical that a Labour-led government would deliver market-friendly policies. ’ The comments mark another vote of confidence for Chancellor George Osborne , who was praised last week by International Monetary Fund chief Christine Lagarde for his handling of the economy . A Tory spokesman said : ‘ This confirms that working people will pay the price for an SNP-Ed Miliband government . ‘ Mortgage rate rises will hit homeowners . Higher borrowing will mean higher taxes and more debt for our children to repay. ’ Chris Leslie , Labour ’ s shadow chief secretary to the Treasury , said : ‘ Labour is pro-business , but not business as usual . We want more competition in banking , a British Investment Bank to boost lending and action to tackle tax avoidance . ‘ The big threat to the City and our economy is a re-elected Tory government taking Britain out of the EU. ’ The comments mark another vote of confidence for Chancellor George Osborne , who was praised last week the head of the International Monetary Fund Christine Lagarde for his handling of the British economy .
Major bank warns against Labour government set up by the the government . Morgan Stanley says anti - austerity agenda would lead to bank rate hike . Second bank warns banks should be pushed to the left by the government . Report a blow to the party 's attempt to gain voters economic competence .