24 October 2003, 13:40  UK GDP data steady, retail sales strong

LONDON, Oct 24 - The British economy grew 0.6 percent in the third quarter of the year, as expected, but retail sales shot up 0.6 percent last month, stronger than the 0.4 percent average forecast. The data will likely be seen by financial markets as cementing the probability of an interest rate rise from the Bank of England next month after it voted by the narrowest of margins this month to keep rates at 3.5 percent. The Office for National Statistics said that the 0.6 percent rise in gross domestic product took the level of output 1.9 percent higher than a year earlier. Both numbers were bang in line with expectations and the 0.6 percent growth is the same as that for the second quarter. But the retail sales figures were overall very strong, especially as August and July's figures were revised up sharply. The Bank of England's main concern is the strength of consumer spending and the housing market so a rate rise before Christmas is looking even more likely. Financial markets had already reacted to the retail sales data after a source had told that the number would be 0.6 percent.//

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