UK Interest Rates: A rise very likely according to Betfair market

UK Interest Rates: A rise very likely according to Betfair market”

Ben Kumar, an investment manager at 7IM delivered comment that was a little more positive: "The market has been pricing in a November interest rate hike at an 80 per cent probability since the start of October".

UK GDP rose by 0.4 per cent in the third quarter of the year, the Office for National Statistics revealed.

If it happens, it will be the first rise since 5 July 2007. In this scenario, the average variable rate borrower on a repayment loan would see their monthly payment rise by £16.56, that's £82.8million across the UK.

United Kingdom economist Ruth Gregory, of research company Capital Economics, said the figures "have probably sealed the deal on an interest rate hike next week".

"The Bank of England is eager to undo the emergency rate-cut made following the referendum, and today's GDP release will bolster their case - without being so strong as to make investors nervous about a rate hiking cycle beginning in earnest".

"We would urge the (BoE) to proceed with caution on raising rates, as tightening monetary policy amid the current economic and political uncertainty could weaken growth", said Suren Thiru, head of economics at the British Chambers of Commerce.

The slightly better growth figures will strengthen the arguments of the interest rate hawks on the Bank of England's monetary policy committee. Recent comments by ratesetters, including Mark Carney, the governor, have raised expectations for an imminent increase.

And with economic growth more robust than many economists expected, those who support that direction of travel on the MPC will be emboldened. And these are the main reasons Stone believes a rate rise is on the cards. That hasn't happened in the U.S., where rates have been rising gradually. A London based borrower with 20 years left on their mortgage, now paying an interest rate of 2.25%, would see annual charges increase by £336.

The pound ticked up against both the euro and the dollar after the figure was released.

Mr Hammond said: 'We have a successful and resilient economy which is supporting a record number of people in employment. In a separate statement, he said he was focused on boosting productivity - arguably Britain's biggest economic problem - in order to create more higher-wage jobs.

Shadow chancellor John McDonnell said: "The UK is not growing as fast as many of our trading partners in the European Union or the USA".

A second quarter of contraction means the sector is technically in recession.

In particular, computer programming, motor traders and retailers were the businesses that showed the strongest performance.

But manufacturing also soared by 1 per cent over the quarter, as Britain's factories returned to growth after a period of decline.

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