THE economy has received a triple boost from figures showing upturns in lending, service sector confidence and manufacturing.

Mortgage lending continued its strong run during October, with a record £25.28bn 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.

Manufacturers also provided good news, with a survey from the Chartered Institute of Purchasing and Supply 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 is beginning to have an effect.

Retail analyst 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 were 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 Monetary Policy Committee will raise interest rates when it meets 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 Engineering Employers Federation (EEF) warned that the recent upturn in manufacturing had still to develop into a full-blown recovery.

Alan Hall, EEF Northern director, said: "By region, the North-East was one of the strongest regions for the third consecutive quarter in terms of output and orders.

"Conditions in manufacturing are improving but not fast enough to call it a recovery.

"Until our major markets in Europe show more life, it is hard to see much more than a steady improvement for manufacturing."