The economy has been given a triple boost thanks to figures showing an upturn in lending, service sector confidence and manufacturing.

Mortgage lending continued its strong run during October, with a record £25.28 billion advanced, the Bank of England said.

Prospects in services were also looking up with confidence across the sector rising for the first time in 18 months, according to a study by Grant Thornton and the CBI.

And manufacturers provided good news, with a survey from the Chartered Institute of Purchasing and Supply (CIPS) showing the sector expanding at its fastest rate for nearly four years.

However, there was a hint that last month's 0.25 per cent rise in interest rates to 3.75 per cent was hitting home.

Retail analysts Footfall said a five per cent fall in the number of shoppers across the UK last weekend against the same weekend last year showed that people are holding off in the hope of netting late pre-Christmas bargains.

The overall upbeat picture is likely to increase speculation about whether the Bank of England's monetary policy committee will raise interest rates later this week.

But experts say the bank is likely to resist pressure to do that in favour of freezing rates until it has assessed the impact on consumer spending and borrowing of last month's rise.

The upturn in service sector confidence included the first rise among consumer services firms - hotels and restaurants - since May last year and a second successive quarter of optimism among business and professional services companies.

Despite enhanced hopes for the sector, the CBI and Grant Thornton study found sales among consumer services firms still under pressure in the last quarter.

Tuesday December 02, 2003