British economy growing at fastest rate since crisis
BRITAIN'S economy grew last year at its fastest rate since the financial crisis, raising questions about how long the Bank of England can keep interest rates at a record low.
Barring construction and oil and gas extraction, all major sectors of Britain's economy expanded in the final three months of 2013, concluding its best showing since 2007, the Office for National Statistics said.
The economy grew 0.7pc quarter-on-quarter from October through December, in line with forecasts for that pace to ease from 0.8pc in the third quarter. Growth for the full year rose to 1.9pc.
That was a vast improvement over 2012's 0.3pc. It bodes well for the coming 12 months and should improve the government's standing just over a year before a national election.
The data also led to more speculation about when the bank will raise rates.
Such speculation was already being fuelled by a steep drop in unemployment towards the 7pc threshold at which the bank has said it will consider the future direction for monetary policy.
"We forecast the bank will start hiking in Q2 2015, given the strong turnaround in the economy and labour market," said Blerina Uruci, an economist at Barclays.
A Reuters poll of economists last week showed a 30pc chance the bank will hike rates from their record low 0.5pc this year.
The fourth-quarter data's failure to beat forecasts caused sterling to slip briefly.
Bank of England governor Mark Carney has said there is no need for rates to rise any time soon.