Continuing economic growth fuels expectation of rate rise

The UK economy grew 0.6% in the first quarter of 2006, representing the 55th consecutive quarter of economic expansion. The pick-up in manufacturing activity was particularly welcoming, reflecting a broader advance in the global economy. This bodes well for UK exporters. The stronger economic data has meant interest rate expectations have firmed up a little, with notions of a cut giving way to no change or even a rise. The Bank of England's Monetary Policy Committee (MPC) is unlikely to make a knee-jerk reaction to recent high commodity prices and enthusiasm for a precautionary rate hike ...