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UK Q2 growth better than expected

Official figures show that British economic growth picked up slightly in the second quarter of 2007.

The economy grew by 0.8% in the three months to June 30, compared with 0.7% during the first three months of 2007, the Office for National Statistics said in an initial estimate.

'The main reason for this increase is stronger production and construction output offsetting weaker growth in total services,' the ONS added.

But economists are predicting that the five British interest rate hikes since August 2006 will  contribute towards slower growth before the end of 2007.

The ONS said the annual rate of growth in Q2 was 3%. The quarterly and annual figures were both slightly ahead of expectations.