June 8, 2007 / 11:11 PM / 13 years ago

Economy gathers pace

A wallet is displayed in central England, January 16, 2007. The economy picked up pace in the three months to May, keeping up pressure for higher interest rates, the National Institute of Economic and Social Research said on Saturday. REUTERS/Darren Staples (BRITAIN)

LONDON (Reuters) - The economy picked up pace in the three months to May, keeping up pressure for higher interest rates, the National Institute of Economic and Social Research said on Saturday.

The thinktank estimates gross domestic product rose by 0.8 percent in the three months to May compared with the previous three months — the fastest rate of growth in almost a year.

Official data showed the economy grew by 0.7 percent in the first quarter of the year and recent surveys suggest it has continued to build up steam.

The Bank of England may be concerned that persistently strong growth will put upward pressure on prices, requiring further monetary tightening.

Money markets show domestic interest rates, currently 5.5 percent, are likely to hit 6 percent by the end of the year and most economists expect the next move to come in July or August.

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