UK economy grows 0.4% between July and September
The UK’s economy had higher than expected growth in the three months to September – increasing the chances of a rise in interest rates in November.
Gross domestic product (GDP) for the quarter rose by 0.4%, compared with 0.3% in each of 2017’s first two quarters, according to latest Office for National Statistics figures.
Economists said the figures were a green light for a rate rise next week.
If it happens, it will be the first rise since 5 July 2007.
The financial markets are now indicating an 84% probability that rates will rise from their current record low of 0.25% when the Bank of England’s Monetary Policy Committee (MPC) meets on 2 November.
Governor Mark Carney indicated to the BBC last month that rates could rise in the “relatively near term”.
UK economist Ruth Gregory, of research company Capital Economics, said the figures “have probably sealed the deal on an interest rate hike next week”.
While many economists echo that view, some think the Bank of England will keep rates where they are.
“If all we can muster… is an acceleration in economic growth that’s so small you could blink and miss it, the Bank of England could still think better of a rate rise next week,” said Ross Andrews from Minerva Lending.