Britain's economy defied expectations and grew by 0.4% in the third quarter of this year. This raises the prospect of an interest rate rise when the Bank of England meets on 2 November.
The “surprise acceleration” has paved the way for the Bank of England to raise interest rates for the first time in a decade next week, says Bloomberg.
GDP grew at 0.4% from July to September, up from 0.3% in the previous quarter.
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Growth was “slightly higher” than the 0.3% predicted by City analysts, The Independent reports, but it came at a “slower pace” than last year.
In its first estimate of growth for the three months to September, the Office for National Statistics (ONS) said spending in the services sector was the engine behind the economy’s performance, Sky News reports.
The news organisation was quick to point out that we’re not out of the woods yet. “The fact growth was driven by a pick-up in retail spending and car sales will intensify worries at the Bank of England that people are living beyond their means as unsecured consumer debt levels hover around pre-crisis highs at £200bn,” it said.
Year-on-year growth is at 1.5%, according to the ONS. If that trend continues to the end of the year it would be the slowest annual expansion of the economy since 2012.
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