British quarterly GDP growth steady at 0.5 pct: think-tank

Source: Xinhua| 2017-12-09 06:33:46|Editor: yan
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LONDON, Dec. 8 (Xinhua) -- The British economy continued its more buoyant end to 2017 with growth of 0.5 percent in the three months up to the end of November.

Figures released by the independent economic think-tank the National Institute of Economic and Social Research (NIESR) on Friday showed growth remained at the same level for the September to November period as for the August to October quarter.

This is slightly stronger than the official statistics outturn from the Office of National Statistics (ONS) for the third quarter which was 0.4 percent.

Amit Kara, Head of UK Macroeconomic Forecasting at NIESR, told Xinhua on Friday: "It's a reasonable set of figures; our view is that economic growth will hover around 0.4-0.5 percent so this current print is slightly stronger than is sustainable."

Industrial production, which in separate figures on Friday saw the manufacturing sector increase for its sixth successive month, the longest run of growth for 23 years.

Kara said: "It's broad-based with both services and industrial production doing OK, with construction quite weak."

Kara said that within production figures, the manufacturing sector has been doing "quite well" because of weak sterling and stronger exports.

Manufacturing's strong reading was in part because of the effect of a favorable exchange rate on exports, with the pound now trading at 1.34 U.S. dollars down from 1.48 U.S. dollars at the time of the Brexit referendum in 2016.

Economic activity has picked-up in the second half of the year and GDP growth at 0.5 percent is somewhat higher than the economy's speed limit, said Kara.

"If, as we expect, the economy continues to expand around this pace and inflation remains elevated, there is a case for the Bank of England to gradually raise the policy rate to stop the economy from overheating."

Kara forecast a succession of bank rate rises of 25 basis points to take the rate from the current 0.5 percent to 2 percent by 2021.

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