Economy is poised for lift-off after strong services sector growth

The figure builds on the 0.7 per cent seen in the three previous months and the 0.4 per cent in the first quarter of the year. Rate forecast: Recent services figures are likely to add to growing conviction on markets that the Bank of England will raise the historically low 0.5 per cent interest rate by early 2015. Output fell 7.2 per cent in 2008 and 2009 as boom turned to bust under the last Labour government, and it remains 3.3 per cent below the pre-recession peak. While we believe domestic demand likely grew by at least 1 per cent in the third quarter, we suspect that negative trade may have limited GDP growth to 0.9 per cent quarter-on-quarter.

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