It is looking less likely that the Bank of England will have to inject more cash into Britain’s economy after GDP grew twice as fast as expected in the third quarter of this year.
The Office for National Statistics said the economy grew 0.8 percent between July and September, down from a nine-year high of 1.2 percent in the second quarter but at the very top end of economists’ forecasts.
However much of the expansion was in the construction sector and that boost has peaked as public works contracts are being cut in the government’s austerity drive and house prices weakened over the summer.
It was a very mixed picture as industrial output growth slowed while services growth was unchanged.
British finance minister George Osborne said the figures do give him confidence that a steady recovery is underway.
And they were enough for credit rating agency Standard & Poor’s to raise its outlook on Britain’s triple-A credit rating to ‘stable’ from ‘negative.’
It said that was because the new coalition government’s spending cuts showed its resolve to slash Britain’s massive budget deficit, but economists maintain those cuts will inevitably lead to a sharp slowdown next year.