LONDON – The United Kingdom’s gross domestic product was estimated to have grown by 0.4 percent in the third quarter of 2017, compared to 0.3 percent in the first two quarters of the year, the Office for National Statistics revealed Wednesday, raising the chances that historically low interest rates could rise.
The latest GDP figures, which were propelled by a boost in manufacturing and a strong service industry, surpassed the expectations of analysts, who had forecast a similar growth rate seen in Q1 and Q2 due to uncertainties posed by Brexit.
“We have a successful and resilient economy which is supporting a record number of people in employment,” said the UK’s Chancellor of the Exchequer Philip Hammond.
“My focus now, and going into the Budget, is on boosting productivity so that we can deliver higher-wage jobs and a better standard of living,” he added.
The growth in production is likely to increase the probability that the Bank of England will raise interest rates at the next committee meeting, scheduled for Nov. 2.
UK interest rates have been at a historical low of 0.25 percent since August 2016, following the Brexit referendum two months prior.
In finalizing such a decision, BoE governor Mark Carney will have to take into account that the UK’s inflation rates currently sit at a five-year high of 3 percent, 1 percent higher than its target.