British economy defies global slump

Britain's economy grew at a much faster rate than expected in the third quarter of 2001.

Britain's economy grew at a much faster rate than expected in the third quarter of 2001.

It defied the global slowdown that has been exacerbated by last month's attacks on the United States.

National Statistics (NS) said today the economy expanded a provisional 0.6 per cent on the quarter, well above the 0.4 per cent of the second quarter - a figure economists had expected to be repeated in the third.

That left an annual growth rate of 2.2 per cent and appeared to show the British economy growing close to its long-term trend rate. Other major economies such as that of the United States have virtually ground to a halt.

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The Bank of England's Monetary Policy Committee has already lowered borrowing costs six times this year to a 37-year low of 4.5 per cent in a bid to ward off recession.

But economists said further monetary easing was still on the cards.

The breakdown of the latest data showed the British economy was kept afloat by another robust performance from the service sector, particularly retailing, while manufacturing and industrial production suffered another fall.

Britain's economy has now had 37 successive quarters of growth since the trough of the 1992 recession. It has grown 30.8 per cent since then.