July 1, 2006
Economic growth exceeds forecasts for 2006
Written by Brian Turner
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The Office for National Statistics (ONS) has reported that the UK saw ecnomic growth above expectations over the first three months of the year.
ONS said that GDP had increased by 0.7% instead of the forecasted 0.6%, mainly due to increased activity in the business services sector.
The news is likely to add to pressures for the Bank of England to look to raise interest rates, especially while inflation is still climbing above targets.
However, some commentators think the Bank of England may leave off from any interest rate rises until 2007, in order to establish clear observable trends before acting.
However, if they do so while inflation continues to rise, this could mean a series of rate rises may be required over 2007, to make up for failing to take action earlier.
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[…] The rise comes at a time when the UK economy continues to perform better than expected. […]