UK economic growth strengthens in third quarter to 0.4 per cent

Bank of England may raise interest rates on November 2

In a small boost for finance minister Philip Hammond presenting the annual budget on November 22, Office for National Statistics (ONS) released figures today stating that Britain’s economy has picked up speed in its third quarter.

UK’s quarterly gross domestic product growth rose to 0.4 per cent, compared with 0.3 per cent growth in the three months to June 2017. Analysts believe that this unexpectant growth is likely to push Bank of England to raise interest rates on November 2.

UK’s growth was driven by a pick-up in retail spending, but manufacturing especially car sales also contributed to this growth.

Read realted story: Britain posts smallest September deficit in a decade

Report states that Britain performed much better than most economists expected immediately after last year’s vote to leave the EU, and was reportedly among the fastest-growing major advanced economies in 2016. But it has slipped to the bottom of the pack this year, with worst first-half performance since 2012.

Analysts suggest that BoE is likely to return rates to 0.50 per cent from 0.25 per cent after its next meeting, due to concerns that the economy cannot grow as fast as it used to without generating excess inflation.

“Growth in the third quarter continued at a similar rate as seen in the first half of the year,” said ONS head of national accounts Darren Morgan.

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