UK Growth Diminishes Hopes of Rate-Cut

The Office for National Statistics said its first estimate of third-quarter gross domestic product showed growth of 0.8 percent, in line with the previous three months and ahead of forecasts for a slowdown to 0.7 percent.

The annual rate of growth of 3.3 percent was the best figure since the second quarter of 2004 and above expectations of 3.1 percent.

Some economists had urged the Bank of England to cut interest rates before the end of the year to offset the effect of the global credit crisis on the domestic economy.

"Along with recent data showing buoyant retail sales in September and a still healthy labor market, this dilutes the case for an interest rate cut as soon as November," said Howard Archer, chief U.K. and European economist at Global Insight.

"As yet there is no compelling sign that economic activity is slowing markedly and the Bank of England believes that some slowdown is necessary to ease underlying inflationary pressures," he added.

The Bank of England held its benchmark interest rate steady at 5.75 percent earlier this month after weeks of turmoil in global financial markets. Before the credit markets seized up, many economists had been forecasting another rate increase to 6 percent later this year or early next year.