Rise likely after economic surge

BY DAVID CRAIK INTEREST rates are set to go up for the first time in a decade after an unexpected summer boost to the economy.

The Office for National Statistics said gross domestic product – the value of everything the country churns out – grew by 0.4 per cent between July and September.

This beat forecasts of a 0.3 per cent rise.

Most analysts said the figures increased pressure on the Bank of England to raise rates from their record low of 0.25 per cent when they meet next Thursday.

A rise, tipped to move the rate to 0.5 per cent, would be the first time it has climbed since July 2007 when a 0.25 per cent hike took the level to SPEAKING OUT Hammond 5.75 per cent. Ben Brettell, senior economist at Hargreaves Lansdown, said the GDP performance made a rise next week “a near certainty”.

The figures were boosted by a strong performance from the dominant services sector – especially IT and retail – and manufacturing as the weak pound helped exports.

However, the construction sector was negative for the second quarter in a row, meaning it is technically in a recession. Chancellor Philip Hammond said: “We have a successful and resilient economy which is supporting a record number of people in employment.”

But others were more cautious.

Ross Andrews, of fixed-rate bond providers Minerva Lending, said: “While these numbers are welcome, they are not going to set anyone’s newspaper on fire.

“Consumer confidence was running at a six-month high in September and a fallen pound has lifted the export mood.

“If all we can muster is an acceleration in economic growth that’s so small you could blink and miss it, the Bank of England could still think better of a rate rise next week.” PENSION savers have withdrawn £15million every day from their pots since the pension freedoms were introduced in 2015.

Latest figures from HMRC reveal that the demand to take cash from pensions continues to rise. In the past three months, 198,000 people withdrew £1.59billion, up from £1.54billion in the same period in 2016.

While it’s good that savers are in control of their money, the pensions industry has major concerns that too few people are getting professional guidance to help ensure they make informed decisions.

Alistair McQueen, head of savings and retirement at Aviva, said: “Savers must be supported in their use of the freedoms, with Aviva’s data suggesting a majority of their customers are acting without the help of financial advisers or the free Pension Wise service. The Financial Conduct Authority report that on average, people take just half a day to consider their options before acting. Forty years of saving should not be put at risk in a few hours.”

The Pension Wise service at pensionwise.gov.uk (or call 0800 138 3944) offers free, impartial guidance on pensions for people over 50. BOSSES are ignoring the pressures faced by their workers and planning another year of low pay rises.

Research by analysts XpertHR found that three out of four private sector firms are set to keep awards at the same level as this year. That means a rise of two per cent – half the retail price inflation figure of 3.9 per cent. FORMULA One sponsors Heineken yesterday said beer sales had raced higher, despite a slump in demand from British drinkers.

The world’s second-largest brewers said sales between July and September rose 2.5 per cent helped by a strong performance in Vietnam, South Africa, Ethiopia and Russia.

However, sales in Europe dropped 2.8 per cent as the continent suffered from wet summer weather.

UK sales took a doubledigit dive as supermarket Tesco pulled some Heineken brands from their shelves over planned price hikes.