UK economic growth inches up to strengthen the case for a series of staged interest rate rises

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Economists said the UK was on track to expand at 0.5 per cent in the final quarter of 2017 (Source: Getty)

The UK economy grew by 0.5 per cent in the three months to October, economists said today, ahead of official 0.4 per cent expansion recorded in the third quarter.

The latest figures mean final quarter GDP growth is "closely tracking" projections for 0.5 per cent expansion, the National Institute of Economic and Social Research (Niesr) said.

"We expect the pattern of demand in the UK economy to rebalance towards international trade in response to strengthening global growth and weaker sterling and away from domestic demand," said Niesr head of macroeconomic forecasting Amit Kara.

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Last month official figures from the Office for National Statistics (ONS) indicated Britain's economy had expanded by 0.4 per cent in the three months to the end of September.

While today's flash figures suggest a further expansion in the final months of 2017, Kara said this was against a backdrop of a "time when growth in other OECD countries has strengthened".

Britain's rate of growth and elevated inflation mean it won't be long before the Bank of England will be looking towards a further 0.25 per cent rise in interest rates, Kara said.

He added:

There is a case for the Bank of England to gradually raise the policy rate to stop the economy from overheating. Consistent with that view, our latest forecast for the UK is conditioned on a 25 basis points increase in Bank Rate every six months such that the policy rate reaches two per cent in 2021.

Read more: UK economic growth picks up slightly in third quarter