UK growth estimate revised down in second blow for George Osborne

Annual growth in the 12 months to September was knocked down from 2.3% to 2.1% by the Office for National Statistics.

The revision will add to fears that the Chancellor’s upbeat forecast in last month’s Autumn Statement will prove too optimistic. (Getty Images)

The estimates of the UK economic growth have been revised down in a consecutive dose of bad news for the Chancellor of the Exchequer.

The GDP rose by only 0.4 per cent in the third quarter of the year, compared with their previous figure of 0.5 per cent, according to government statisticians.

Annual growth in the 12 months to September was knocked down from 2.3 per cent to 2.1 per cent by the Office for National Statistics.

The revision will add to fears that Britain’s robust economic recovery is running out of steam and that the Chancellor’s upbeat forecast in last month’s Autumn Statement will prove too optimistic.

It comes that day after disappointing public finance figures showed that Government borrowing increased to £14.2 billion in November, £1.3 billion more than last year.

The ONS update also reveals a much slower pace of investment in items such as plant, machinery, equipment and buildings.

So-called gross fixed capital formation grew by 0.6 per cent over the quarter, much slower than the 1.3 per cent previously estimated.

But the pace of consumer spending - accounting for more than half of the economy - ticked up from 0.8 per cent to 0.9 per cent.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The recovery clearly has exacerbated the economy’s long-standing weaknesses... the tremendous boost from declining saving to consumer spending since the recession can not be repeated.”