Chancellor Gorden Brown is expected to raise his forecast of UK's growth for the year as figures show a surge in business investment helped the UK economy grow above its long term trend in the third quarter.

Brown, who is to presents his pre-Budget report on Dec. 6, predicted that the country's economy would grow by 2 to 2.5 percent.

The Office for National Statistics (ONS) confirmed Friday its earlier assessment that GDP grew 0.7 percent between July and September, over the previous three months.

Against the same period a year ago, UK's GDP was up by 2.7 percent, rounded down from 2.8 percent.

The report, according to Financial Times, added to evidence that a rebalancing of the economy was continuing, with business picking up some of the slack from a less ebullient consumer.

Gross public and private sector investment, climbed by 2.3 percent in the third quarter against the previous three months, up sharply from the 0.6 increase recorded for the second quarter of 2006. Of this, investment by business was up by 3.1 percent.

Purchases of services and semi-durable goods helped household spending to rise by 0.4 percent quarter-on-quarter, but this was a slower pace of growth than the 0.9 per cent seen in the second quarter, according to ONS figures.

The services sector grew by 0.8 percent between the second and third quarter, while manufacturing continued to rebound, up 0.6 percent over the same period.

With the headline GDP growth number coming in as expected there was little reaction in the money markets.

Source: Xinhua