US economy grows at fastest pace in nearly two years

The US economy grew faster than expected in the third quarter of the year, helped by a tight jobs market and consumer spending.

It marked the biggest rise seen since the last three months of 2021.

Consumers spent big despite the Federal Reserve trying to clamp down on spending with higher interest rates.

Analysts expected that the economy would grow by 4.5% in the third quarter of this year.

But a strong jobs market meant that consumers were able to ask for bigger pay-packets and keep spending on concerts, movies or holidays over the summer.

The latest figure is a big spike from the 2.1% growth seen in the three months to July.

In a statement, the US Bureau of Economic Analysis said the increase reflects "accelerations in consumer spending, private inventory investment, and federal government spending" among other factors.

It raises a question over previous predictions that the world's biggest economy could possibly enter a recession.

The latest data comes ahead of a key meeting for the US Federal Reserve, where it will decide whether or not to raise interest rates again next week.

Raising interest rates is one of the key tools central banks use to try to tackle inflation. By making borrowing more expensive, the theory is consumers will spend less and lead to slower price rises.

The European Central Bank left interest rates unchanged on Thursday as higher borrowing costs start to work their way through.