HOMEOWNERS across Britain are today warned an expected major boost to jobs in 2014 could mean mortgage rates going up earlier than expected.

At the samne time new analysis suggests the smallest interest rate rise could leave more than a million people at risk of defaulting on their home loans.

The Chartered Institute of Personnel and Development says in a report that the rise in employment in 2013 is set to continue next year with Mark Beatson, its chief economist, predicting a high ­likelihood it will rise by at least 300,000 and even by 500,000 in 2014.

Unemployment across the UK fell by 99,000 in the three months to October, to 2.39 millon, a jobless rate of 7.4%.

A year earlier the figure was 2.51m or 7.8%. Unemployment in Scotland over the same period fell by 7000 to 196,000, a rate of 7.1%. A year earlier it was 204,000 or 7.6%.

Meanwhile there were a record 30.09m people in work in August to October across the UK, up 485,000 on the year. In Scotland over the same period, 2.55m people were in work, an increase of 74,600.

While a big boost to the jobs market would be generally welcomed, it may have implications for those with mortgages if UK unemployent falls below 7%.

That is the rate which Mark Carney, the Governor of the Bank of England, has signalled might lead to a rethink on interest rates.

Mr Beatson noted that 2013 was the fifth year in a row when average earnings fell in real terms, which was "unprecedented" in at least the last 70 years.

He said: "This time last year we were talking about the UK's 'jobs enigma'. Since then, labour market performance has continued to exceed expectations, turning the UK labour market into a jobs machine. Employment growth looks set to continue at an impressive rate over the year to come."

In his New Year message, John Cridland, director general of the CBI, said the recovery was taking root. He said: "For the first time since the start of the recession, 2014 will see most firms increasing the size of their workforce, boosting their graduate intake and the number of apprentices."

Interest rates have remained at the historic low of 0.5% since March 2009. Earlier this year, analysts forecast they would begin to rise in 2016.

The boost to growth, increasing employment and falling unemployment have already led to the timescale being brought forward to 2015.

But if the feel-good factor returns stronger and earlier, then rates could begin to rise even sooner.

A report from the Resolution Foundation think-tank said an optimistic scenario would be for interest rates to rise slowly to 3% by 2018, with strong growth evenly spread between rich and poor.

But the foundation said even in that situation, 1.12 million homeowners would spend more than half of their net income on mortgage repayments, the generally accepted sign of over-indebtedness. If the Bank raised rates to 5% by 2018, and growth was sluggish, the think-tank said two million households would be in financial trouble, half of them families with children.

The Foundation's report said: "Britain's personal debt problem remains a cause for real concern. While record low interest rates have reduced current repayment costs, fewer people than we hoped have used this breathing space to pay off their debts."

Gillian Guy from Citizens Advice warned of a financial timebomb. She said: "The rising cost of energy, food and travel has been absorbing any spare income people may have. This means that in some cases there is little or nothing left to cope with larger mortgage repayments."