UK GDP Up By 0.8%

By Stewart Douglas

The UK economy has grown beyond analyst predictions for the first half of this year. 

The increasing growth comes in spite of earlier dampening measures implemented by the Bank of England

Figures released today reveal that the UK GDP has risen by 0.8% over the last three months, ahead of the forecast rate of growth.

The growth figures would suggest an even further rise in interest rates is on the cards to keep inflation under wraps.

GDP, or Gross Domestic Product, is the sum value of all products and services output within an economy, and is used as a comparative indicator in contrasting world economies, and performance over time.

The figures released by the Office for National Statistics show GDP growth 0.1 percentage point beyond expert predictions, suggesting that the UK economy is gathering more momentum than the Bank of England would like.

With consistent growth within the economy, inflation is a real concern for those responsible for financial policy.

One way of curbing inflation is to increase interest rates, and experts suggest that a sixth consecutive rates increase could be on the card over the coming weeks.

Growth over this year can be measured at 3.0%, above analyst projections of 2.9%.  The news can be seen as an indication of growing economic performance, despite the fact that the Bank of England have been actively engaged in suppressing runaway growth and inflation over the best part of 2007.

The news today has resulted in the strengthening of the pound against the dollar, which yesterday slipped off the back of falling consumer sales in June.

Growth in GDP is likely to signal a further interest rate rise beyond the current level of 5.75% as the Bank of England look to calm the UK economy.  However, the effects of an increase in lending rates is likely to cause financial hardship at the lower end of the property ladder.