Quarterly GDP growth rises to 0.5%

The monthly estimate is closely tracking NIESR's forecast for real GDP growth for the final quarter of this year which also stands at 0.5%.

Amit Kara, Head of UK Macroeconomic Forecasting at NIESR, said: “We estimate that economic growth recovered to 0.5% in the three months to October from 0.4% in the third quarter.

"Although economic growth is likely to be stronger in the second half of this year compared with the first, it is important to note that activity has slowed since last year and this at a time when growth in other OECD countries has strengthened. Looking ahead, 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.

"If, as we expect, the economy continues to expand at 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. 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 2% in 2021.”