According to the UK Office for National Statistics (ONS), gross domestic product (GDP) grew at an annual rate 3% in Q1 2007.

GDP grew at 0.7% during the period from the previous quarter. The strong growth will reinforce expectations of a rate rise.

Mervyn King, Bank of England governor, said that economic expansion has proved resilient to four interest rate increases and there are upside risks to inflation. His monetary vote this month for an interest-rate increase has fuelled speculation that the Monetary Policy Committee will raise the Bank of England’s key interest rate to 5.75% this week.
In addition, the ONS figures showed that the savings ratio - the amount of income saved by individuals - was down to 2.1%, the lowest reading since 1960, as consumer spending remained strong.