The Construction Products Association is predicting a rise in interest rates this month, following a strong set of economic data.
GDP growth was stronger than expected in the third quarter, rising 0.7% to 108.3 (see table, right). Construction growth was also up 0.5% to 106.8.
The number of property transactions fell in the third quarter to 336,000, compared with 454,000 in the previous three months.
Retail sales were weaker in September than August, falling to 130.5 from 131; however in the first three quarters retail sales were up 5% from the previous year. They grew from 127.5 in the third quarter of 2005, to 130.7 in the third quarter of 2006.
Máren Baldauf, an economist at the CPA, said: “The figures show that the economy is bouncing back from weakness last year.”
Baldauf added inflation was 2.4% in September – well above the government’s target of 2%.
The Bank of England’s announcement on interest rates will be on Thursday.