UK economic growth revised down

The UK economy grew less than previously estimated between July and September, revised figures have shown.

The Office for National Statistics said UK GDP grew 0.7% in the third quarter, down from its earlier estimate of 0.8%.

It also cut the growth figure for the April-to-June quarter to 1.1% from 1.2%, and the first quarter growth figure to 0.3% from 0.4%.

It blamed the revisions on weaker growth in the construction, business services and manufacturing sectors.

The year-on-year growth estimate was also cut, with the ONS saying that GDP in the third quarter had grown by 2.7% compared with the same point last year, down from the previous estimate of 2.8%.

VAT impact

The latest official figures are likely to increase concerns that the rate of economic growth will slow further in 2011 as a result of the impact of the government's £85bn spending cuts, and VAT rising to 20% from 17.5% on 4 January.

A number of organisations have already recently lowered their forecasts for UK economic growth in 2011.

The CBI business group now expects growth of 0.2% in the first quarter of next year, down from 0.3%.

The British Chambers of Commerce (BCC) is predicting the economy will expand by 1.9% in 2011, but this is down from the 2.2% growth it forecast in September.