The British economy is continuing to grow strongly, the latest data has indicated.

Figures from the Office for National Statistics put real GDP growth at 0.9 per cent in the second quarter of 2004.

That was up from 0.7 per cent growth in the previous three months.

The ONS said both production industries and the service sector saw a robust performance.

Output from the production industries rose by 0.9 per cent, the strongest quarterly growth since Q3 1999.

And services also rose by 0.9 per cent, maintaining the same rate of growth as the previous quarter.

The news will be welcomed in the Treasury, where the chancellor is hoping for a strong economic performance to fund his spending increases and ensure that government borrowing does not exceed official targets.

However the figures make it more likely that the Bank of England will move to increase interest rates at its next monthly meeting.