Home » Money

BoE interest rate hike likely as GDP grows 0.4%

27 October, 2017, 00:40 | Author: Samuel Sharp

However, the main drivers came from the business services and finance sector, which increased by 0.6%.

Peter Dixon, economist at Commerzbank, said that the United Kingdom economy is "running around 0.5 percent per year more slowly than prior to the European Union referendum".

The news will offer some relief in an economy which has suffered a slow 2017 so far, after quarterly growth remained flat at 0.3 per cent in the first half of the year.

"Today's numbers seem to have increased the likelihood of an interest rate rise next week, with sterling gaining nearly half a cent against the dollar".

But the service sector - which accounts for nearly 80% of the economy's output - had the biggest overall contribution with a 0.4% growth over the quarter.

It is also highly probable that, even with a recovery in September, for the quarter as a whole the construction sector will end up being a drag on growth.


"The GDP figures revealed that the economy regained a bit of momentum in the third quarter and have probably sealed the deal on an interest rate hike next week", said Ruth Gregory, UK economist at Capital Economics.

In response to the figures Chancellor Phillip Hammond said: "The UK economy is successful and resilient".

The Monetary Policy Committee (MPC), led by Bank of England Governor Mark Carney (pictured), will meet next on 2 November.

"The figure may also provide support to the Governor of the Bank of England who is looking to raise interest rates this year and a stronger United Kingdom economy should increase the likelihood of this happening".

The expectation of a rate rise has pushed up swap rates - one of the factors that will determine how lenders price their fixed rates. So, while symbolically important, it's unlikely the first rate hike in ten years will be catastrophic for the economy.

Services increased by 0.4%, the same rate as Q2, and remains the largest contributor to GDP growth, with a strong performance in computer programming, motor trades and retail trade. That trend would likely reverse if the BoE increases in the base rate back to its previous level.

Recommended:

  • Garcia interviews herself at the WTA Finals in Singapore

    Garcia interviews herself at the WTA Finals in Singapore

    Wozniacki & Garcia are scheduled not before 4pm (9am BST) on Friday, with Halep & Svitolina not before 7:30pm (12:30pm BST). With that win Wozniacki qualifies for the semi-finals, and is rightly feeling quite confident of her game.
    Justice Department limits use of secrecy orders when accessing digital data

    Justice Department limits use of secrecy orders when accessing digital data

    Microsoft receives thousands of data requests from the US government each year, so having so many secret orders seems at least unusual.
    Breast Cancer Survivor runs for her family and friends

    Breast Cancer Survivor runs for her family and friends

    Saturday's mission was about highlighting the unsung heroes, but it wasn't hard to spot a few superheroes in the sea of pink. Our Jessica Foster was the survivor speaker at the walk and Neysa Wilkins was the event chair.
  • First time ever - majority of Republicans support legalizing pot

    First time ever - majority of Republicans support legalizing pot

    A majority of Democrats supported it for the first time in 2009, a figure that rose to 72 percent this year. Many other states allow marijuana use for medicinal purposes under laws with varying degrees of strictness.
    Star Wars Battlefront II campaign screenshots released

    Star Wars Battlefront II campaign screenshots released

    The slow, steady tension of the scene runs contrary to the often bombastic, spectacular battles that Star Wars is known for. A little bit of background info setting up the story is available at the Star Wars: Battlefront 2 website .
    After that stage fall Gemma Collins is considering suing the BBC

    After that stage fall Gemma Collins is considering suing the BBC

    However, Gemma claims she wasn't fully briefed and wasn't even aware that people would be coming up onto the stage from below. She apologised to the Love Island stars, saying: "I wiped them out and they had to go see paramedics after".
  • Forecast: Heavy Rain Tuesday As The Warm Weather Continues

    Forecast: Heavy Rain Tuesday As The Warm Weather Continues

    MONDAY: Showers will be possible through Midday Monday, but by the afternoon and evening we should turn into mostly sunny skies. However, tomorrow will be the last day of temperatures in the 70s for quite some time as a major pattern change takes shape.

    You can now send money in Facebook Messenger with PayPal

    More than 2.5 million people have linked their PayPal account with Messenger , the mobile payment company said . After that, enter the amount that you want to send or request, add a note if you want, and then tap on "Pay".
    Relive Lonzo Ball's National Basketball Association  debut

    Relive Lonzo Ball's National Basketball Association debut

    Warren to the foul line with one second left, but he missed the first attempt and was forced to intentionally miss the second. A game was on the line, and for the first time in Lonzo Ball's professional career, he put the Lakers on his shoulders.
  • Chelsea 2-1 Everton

    Chelsea 2-1 Everton

    The short socked one was better in the second half, but Unsy wasn't given much reason to not re-insert Idrissa Gueye on Sunday. Conte made a decision to freshen his attack up after bringing Cesc Fábregas , Pedro and Álvaro Morata on to see things out.

    Dustin Pedroia has knee surgery, expected to be out seven months

    Pedroia hurt the knee again this season, and spent two different stints on the disabled list with inflammation. The Boston Red Sox announced that Dustin Pedroia will be out for seven months after surgery on his left knee.
    Hudson's Bay selling Lord & Taylor 5th Ave building for US$850m

    Hudson's Bay selling Lord & Taylor 5th Ave building for US$850m

    It could also add 20 WeWork locations in HBC businesses around the world, Baker said. Lord & Taylor's Fifth Avenue flagship in 2006.


Popular

Kardashians Re-sign with E! for $150 Million
When it comes to Kylie , Kris has no doubts that her youngest child can handle whatever comes her way. "I'm so proud of that kid". Speaking to her sibling , Khloe said: "Baby girl is in honour of Kylie , she's my baby girl". "We created them", Khloe responded.

Konami teases Metal Gear Survive announcement for tomorrow
The game plot is set in an alternate reality and players face the challenge of dealing with a huge number of zombies. The Phantom Pain spin-off will be released in Europe two days later.

New York Bans Vaping Indoors
The bill bans vaping at all the places regular cigarettes are already banned, like restaurants, bars and workplaces. Smokers say inhaling the nicotine through a vapor produced by the devices helps them quit traditional cigarettes.

AAA: Gas prices slowly sliding toward seasonal savings
The price for a gallon of regular declined about 5 cents in the area, from $2.409 per gallon last week to $2.361 on Monday. Belleville has the second-lowest at $2.05, but several stations in town were charging $2.25 or more.

Cardi B kicked out of 'racist' hotel over disturbance, smell of marijuana
Early yesterday morning Cardi B was kicked out of the Hilton Albany in Albany, New York, after she was allegedly smoking marijuana and being too loud in her room.

More than 30 Women Accuse Oscar Nominee James Toback of Sexual Harassment
The allegations against Toback come weeks after the New York Times and The New Yorker expose of Harvey Weinstein . That same libidinous request is repeated in accounts of or alleged victims.

Suns GM: Bledsoe likely done in Phoenix
The Knicks are among the teams who have reached out to Phoenix recently about trading for guard Eric Bledsoe , per league sources. The point guard said in a very simple, but clear tweet: "I Dont wanna be here", which may be his unofficial trade request.

Slain soldier's widow explains why Trump's call made her angry and sad
The widow of a dead U.S. soldier says Donald Trump could not remember her husband's name when he phoned to offer condolences. La David Johnson was among four who died October 4 in Niger when they were attacked by militants tied to the Islamic State.

Packers vs. Saints: Packers' QB Hundley first National Football League start
However, the Saints do still have Drew Brees under center and he began to work his magic in the second half. The Saints have been far from ideal this year. "The name of the game is we have to execute", Hundley said.

SA vs Ban Series: 200-run win for South Africans
Dane Paterson was the pick of South Africa's bowlers with three for 44, while Markram completed a memorable debut with two for 18. After Du Plessis had been carried off the field, Markram ran himself out for 66, with a one-day global century in his sights.