Britain's economy grew an estimated 0.8 percent in the three months to February, unchanged from the three months to January, a leading think-tank said on Tuesday, suggesting the country continues to grow above trend. This means interest rates are likely to rise further in the coming months, the National Institute for Economic and Social Research said in a statement.
"These data confirm that the economy is growing markedly above trend and point to the need for interest rates to rise to normal levels," it said. NIESR always issues its GDP estimate after the Office for National Statistics releases its industrial production data. Those figures remained subdued, showing just a 0.2 percent gain on the month in January. The latest official GDP data are for the fourth quarter of last year which came in at 0.9 percent, well above the 0.6 percent rate that is widely seen as the country's long-run sustainable growth rate.
The Bank of England raised interest rates in November and February, bringing its base rate to 4.0 percent. Analysts reckoned another round of tightening could take place as early as April as the central bank attempts to cool down consumption and the housing market.//