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A Union Jack flag flies near the Elizabeth Tower, commonly referred to as Big Ben, at the Houses of Parliament in central London, U.K., on March 29, 2017.
The U.K. economy grew by 0.4 percent within the third quarter of which year, beating market estimates, in addition to also potentially boosting the chances of a rate hike by the Bank of England.
which was a rise of 1.5 percent year-on-year, according to the Office for National Statistics, with services in addition to also manufacturing being the main drivers of growth, as well as the auto sector.
within the second quarter, the U.K.’s gross domestic product (GDP) rose 0.3 percent (quarter-on-quarter) within the three-month period. Prior to the Discharge, sterling was trading very slightly down against the U.S. dollar at $1.312, nevertheless quickly turned higher on the data. which was trading at 1.3168 against the greenback at 10:00 a.m. London time.
The better-than-expected data suggests which the Bank of England’s anticipated move to raise interest rates to 0.5 percent in November remains on course. The U.K. central bank dropped the figure to 0.25 percent within the wake of the U.K.’s vote to exit the European Union in June 2016.
“We’re at a point currently where no rate hike on November 2 could disappoint the markets in addition to also lead to a drop within the value of the pound,” said Danielle Haralambous, U.K. analyst at the Economist Intelligence Unit, following the data Discharge. “If there will be a rate hike, we believe which will be a one-off, returning the policy rate to 0.5 percent,” she added.
However, despite coming in higher than expected, “growth was not particularly broad based,” warned Ruth Gregory, U.K. economist at Capital Economics. Gregory pointed out which construction output fell by 0.7 percent quarter-on-quarter, though industrial production was up by a “strong” 1 percent.
According to Gregory, the U.K. economy looks set to grow by roughly 1.6 percent which year, in addition to also approximately 2 percent in 2018.
Peter Dixon, economist at Commerzbank, said which the U.K. economy will be “running around 0.5 percent per year more slowly than prior to the EU referendum.” He added which which was unclear “whether which will be a permanent downward shift in growth or whether which reflects cyclical issues.”