London, England, United Kingdom (4E) – The UK economy expanded in the first quarter, putting pressure to the Bank of England’s near zero interest rate stance.
The Office for National Statistics (ONS) said the British economy rose 0.8 percent between January and March, an annualized pace of 3.2 percent. The figure is faster than the 0.7 percent growth in the fourth quarter of 2013 but slightly missed the 0.9 percent growth forecast by analysts surveyed by The Wall Street Journal.
Wednesday’s data suggest the British economy started strong, reinforcing expectations that the country will be among the fastest-growing economies among developed nations this year. The International Monetary Fund (IMF) expects the UK gross domestic product (GDP) to rise 2.9 percent in 2014, the fastest growth rate among the G-7 economies.
Some observers say that the data also suggest slack in the UK economy is being eroded at a faster rate than central bank officials anticipate, adding pressure on Britain’s central bank to raise interest rates soon.
UK’s services sector led the rise in the first quarter, with output increasing 0.9 percent during the period, according to the ONS. Industrial production jumped 0.8 percent and construction output grew 0.3 percent.