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UK 3rd Quarter growth beats estimate

Quarterly gross domestic product growth rose to 0.4 percent compared with 0.3 percent growth in the three months to June 2017, the Office for National Statistics said this morning. A poll of economists had pointed to growth of 0.3 percent.

The vast services industry was behind the bulk of Britain’s economic expansion in the third quarter, but manufacturing also contributed, helped by a rebound in car production.

Britain performed much better than most economists expected immediately after last year’s vote to leave the European Union, and was one of the fastest-growing major advanced economies in 2016.

The BoE is widely expected to return rates to 0.50 percent from 0.25 percent on Nov. 2 after its next meeting, due to concerns that the economy cannot grow as fast as it used to without generating excess inflation.

The figures will also be a small boost for under-pressure finance minister Philip Hammond ahead of his annual budget on Nov. 22, who has limited room for manoeuvre because of Britain’s poor productivity performance.

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