BARCLAYS Bank said the economic outlook gave it cause for caution, but not alarm, as it reported half-year profits rising by 16 per cent, to £1.9bn.

The group said that the first half of the year, to June 30, had seen continuing momentum, with profits driven by more activity on behalf of more customers across the group.

It added that the integration of Woolwich, the former building society it bought last year, was proving to be even more valuable than was originally expected.

Matt Barrett, chief executive, said the numbers reflected good continuing momentum and showed they were continuing to deliver.

He said: "Revenue is very strong, and interestingly, across the board. We generated new customers, and did more with existing customers.

"Costs, we tightly managed, and this was achieved without starving our business."

On the question of how the numbers were being achieved, against a background of a slowing economy, he said: "You could argue there is an excess of doom and gloom by some pundits. There is a cause for caution, but not alarm."

Barclays said that operating profits from its financial services arm rose 59 per cent, to £263m, with net fees and commissions up seven per cent, boosted by strong overdraft lending.

At Woolwich, operating profits on a pro forma basis - which assumes Woolwich was bought at the beginning of last year - fell from £275m to £238m, as a result of a reduced contribution from Barclays' mortgages.

At its stockbroking, offshore services and wealth management arm, Barclays Private Clients, operating profits fell two per cent, to £331m.

Operating profits at credit card arm Barclaycard grew 18 per cent, to £275m.