U.K. Economy Grew 0.7% In Q3: NIESR

(RTTNews) - The British economy revealed a steady pace of expansion in the three months to September and the central bank may raise interest rates in the first quarter of 2015, the National Institute of Economic and Social Research said Tuesday.

Economic output increased 0.7 percent in the three months ending September after growing 0.8 percent in the three months to August, the think tank said. "This means that the U.K. economy is now 3.1 percent larger than it was in the same period in 2013," it added.

In the second quarter, the economy grew 0.9 percent sequentially and 3.2 percent annually, according to the Office for National Statistics.

The latest monthly GDP estimate was the first to consider the revisions to the national accounts data by the ONS, announced on September 30, the NIESR said. While the revisions hardly changed the outlook for the U.K. economy, they brought forward the point at which the U.K. recovered its pre-recession size by nine months, to August 2013, it added.

The U.K. economy is now 3.5 percent larger than it was at its previous peak in January 2008, the NIESR said. "There does however remain a reasonable amount of spare capacity in the U.K. economy," the agency said.

"Given this, we continue to expect the first increase in interest rates to come in February 2015."

Earlier today, the International Monetary Fund left the growth projections for the U.K. unchanged at 3.2 percent for this year and 2.7 percent for 2015.