United Kingdom growth up 0.4 pct in Q3

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"The figure may also provide support to the Governor of the Bank of England who is looking to raise interest rates this year and a stronger United Kingdom economy should increase the likelihood of this happening".

The services sector grew overall by 0.4% in the third quarter, while there was also positive news for the manufacturing and agricultural sectors, which increased by 1% each.

'While GDP growth in Q3 was a slight uptick on the previous quarter, the UK's combined economic growth performance over the first nine months of 2017 was still the weakest since late 2012, and indicates that the United Kingdom economy remains locked onto a low growth trajectory.

Sterling climbed nearly a full percentage point against the U.S. dollar on the figures, which beat the average forecast for growth of 0.3% in a Reuters poll of economists.

Industrial production also expanded by 1pc, boosted by a 1pc jump from manufacturing and a 1.5pc rise from mining and quarrying.

The growth figures have led to financial markets believing a rate rise by the Bank of England is now even more likely, with the probability rising to 84% according to the BBC.

However, the United Kingdom economy is still struggling to bounce back to levels seen in the final quarter of 2016 when GDP rose by 0.6%.

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The ONS data suggested the service industry, manufacturing, auto production and industrial production all helped the slight rise in GDP growth.

Richard Stone, chief executive at The Share Centre said people shouldn't panic just yet: "It should be remembered that any increase in rates will likely just be a reversal of the cut in August 2016".

Britain's budget watchdog has said it expects to chop its forecasts for productivity growth in coming years, suggesting the economy will have less room to grow without generating inflation - a diagnosis shared by BoE governor Mark Carney.

However, the estimated annual growth rate is below the 1.8 per cent achieved in 2016 and the slowest since 2012.

The country is struggling to progress in its European Union divorce talks, delaying crucial negotiations on future trade relations with the rest of the EU.

Earlier this month, the Chancellor acknowledged that a "cloud of uncertainty" over Brexit was "dampening" the United Kingdom economy.

But it slipped to the bottom of the pack earlier this year, posting its worst first-half performance since 2012, largely due to higher inflation caused by the pound's fall after the Brexit vote, at a time when its peers have enjoyed robust growth, While yesterday's figures are a small boost for under-pressure finance minister Philip Hammond ahead of his November budget, they do not alter the broad picture of an economy dogged by poor productivity and squeezed living standards.

"Despite today's marginal improvement, growth has been relatively lacklustre this year. Employment growth remains strong, with the UK's unemployment rate among the lowest in the G7".

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