“The 1.1% increase in GDP in the second quarter was surprisingly strong and well above market expectations. Some features within these figures are puzzling, particularly the exceptional 6.6% growth in construction given the weak state of the housing market. But, overall the figures are very welcome and show that the UK recovery is gathering momentum.
“We must not forget that these positive results do not yet take into account the impact of the tough measures announced in the emergency Budget, which will have a dampening effect on demand. It will be very dangerous if the MPC starts raising rates just when the Budget measures take hold. Businesses are still facing huge pressures and it is important for interest rates to remain as low as possible for as long as possible.”