The pace of economic growth rose above the underlying growth rate in the first half of 1985 as a consequence of recovery from the miners' dispute and first quarter bunching of investment expenditure. In response to higher interest rates and the Chancellor's continuing commitment to the Medium Term Financial Strategy, sterling has strengthened and has remained resilient in the face of continuing uncertanties concerning oil prices. Output is set to grow by more than 3% this year before falling back as the impetus of the rebound from the miners' dispute diminishes and investment expenditure slackens. This slowdown in activity is likely to be reinforced by the current levels of the exchange rate and of interest rates
