The U.K. economy, Europe's second- biggest, grew faster than expected in the third quarter, stoking speculation that the Bank of England needs to raise interest rates more than once to quell inflation.

....Growth accelerated to an annual 2.8 percent, the quickest pace in two years, the Office for National Statistics in London said today. Gross domestic product rose 0.7 percent from the previous quarter, driven by service industries and manufacturing. Economists predicted quarterly growth of 0.6 percent, the median in a Bloomberg News survey.

....The U.K. economy has expanded for 57 consecutive quarters, avoiding the recessions in the U.S., Germany, France and Italy in that period. Prime Minister Tony Blair and Chancellor Gordon Brown have presided over 38 of those quarters, and their stewardship of the economy helped win their Labour Party three consecutive terms of office.

....Industrial production, which accounts for about 20 percent of the economy, expanded 0.3 percent, after zero growth in the second quarter. Growth of 0.7 percent in manufacturing, which grew for a third quarter after a slump in 2005, and increased output in energy supply, boosted production.

Services such as transport, communication and finance expanded 0.8 percent in the third quarter, down from 0.9 percent in the three months through June, the statistics office said. Services account for three quarters of the economy