Data published by the Office for National Statistics (ONS) has revealed that the UK economy grew at a faster pace than expected in the three months to September – sparking concerns over a potentially imminent rise in interest rates.
Gross Domestic Product (GDP) for the three months to September grew by 0.4%, up from 0.3% in the previous quarter – constituting a bigger rise than many economists had anticipated.
Experts have stated that the growth in GDP serves as the ‘go ahead’ for an interest rates rise. The Bank of England’s Monetary Policy Committee (MPC) is due to decide whether interest rates will rise when it meets next week.
A decision to raise interest rates will mark the first rise in just over a decade.
Responding to the news, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), commented: ‘With the latest GDP data confirming that the UK economy is still in a challenging period, these figures are likely to weigh on whether the MPC will raise interest rates next month.
‘We would urge the MPC to proceed with caution on raising rates, as tightening monetary policy amid the current economic and political uncertainty could weaken growth.’