The UK economy grew twice as fast as expected in the third quarter of this year, official data showed today, dimming the chance of more quantitative easing from the Bank of England in the near term.
However, growth is still expected to slow next year as government spending cuts bite, value-added tax rises and the rebound in construction activity is likely to wane.
The Office for National Statistics said the economy grew 0.8 per cent between July and September, a quarter of which was due to the construction sector, which represents barely 6 per cent of the economy.
Analysts had forecast growth of 0.4 per cent on the quarter -- one third the rate seen in the first three months of the year.
On the year, GDP grew by 2.8 per cent -- the fastest annual rate in three years and up from 1.7 per cent in the previous quarter.
The statistics office said the third quarter was the first this year not to have been distorted by weather-related effects which depressed output in the first quarter and boosted it in the second.
Annual construction output growth of 11 per cent was the highest since the first quarter of 1988.
Services growth held steady at 0.6 per cent on the quarter but industrial output growth slowed to 0.6 per cent from 1 per cent in the previous quarter.
Reuters