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HomeBusinessGrowth figures raise chances of rate rise

Growth figures raise chances of rate rise

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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.

Services and manufacturing industries grew during the period.

Industrial production rose in July and August but construction output fell.

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.

UK economist Ruth Gregory, of research company Capital Economics, said the figures "have probably sealed the deal on an interest rate hike next week".

The service industry grew by 0.4% from July to September, the same rate as in the previous quarter, making it the biggest contributor to the growth figures.

Computer programming, motor and retail trades were the areas that showed the strongest performance.

Construction contracted for the second successive quarter, although it is still well above its pre-downturn peak.

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