The UK economy grew by 0.4% in the third quarter, outperforming market expectations, raising the likelihood of the Bank of England starting to tighten monetary policy and raising interest rates soon.
Data from the National Bureau of Statistics showed GDP growth by 1.5% on yearly basis, supported by the growth of both the service and manufacturing sectors, as they were the main drivers of growth in the economy besides improvement in the automotive sector.
In the second quarter, gross domestic product (GDP) in the UK rose by 0.3% on quarterly basis. The data, which exceeded market expectations, suggests that the UK's rate hike will accelerate to control the risk of excessive inflation. The last time the Bank of England cut interest was following the UK's vote for Brexit in June 2016 when interest rates reached 0.25%.
The services index rose by 0.2% on a monthly basis and by 0.4% quarterly. The service sector grew by 0.4% to become the most important factor contributing to GDP growth during the period. The manufacturing sector resumed its growth by 1.0% on a quarterly basis.