UK Q3 economic growth figures revised down

| December 22, 2010 | 0 Comments

The Office for National Statistics (ONS) has today revealed the UK economy grew by 0.7% in the July to September period – down from its previous estimate of 0.8%.

On an annual basis, meanwhile, growth was also revised down to 2.7% from 2.8%. Both figures surprised economists who had expected quarterly and annual growth to remain unchanged.

Today’s estimate is the third and final reading, while the first estimate of fourth quarter growth will be available in late January.

According to the ONS, the downward revision for quarter three was attributed to weaker growth in construction and business services and finance.

In the meantime, the ONS also lowered the growth figure for the April to June quarter to 1.1% from 1.2%.

Many experts fear that the Government’s spending cuts will hamper growth and, therefore, the economy is expected to slow in the next few quarters as household spending is likely to take a hit.

As a result, several business organisations have revised their forecast for UK economic growth next year.

Earlier this week, employers’ group, the Confederation of British Industry (CBI), said stubbornly high inflation and public sector job cuts will slow the economic recovery with growth falling to just 0.2% in the first quarter of 2011.

However, it does not expect the UK fall back into recession and expects growth to rise to 0.4% in the second quarter of 2011.

Meanwhile, growth should pick up to 0.5% in the third quarter, giving a 2% annual growth rate for the 2011 year.

The CBI is also estimating growth will be 2.4% for the 2012 year.

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