Economic growth slows in the UK

The UK’s economy grew at a slower pace than expected at the end of last year, official figures revealed today.

England's Office for National Statistics (ONS) said gross domestic product (GDP) rose 0.7% in the fourth quarter of last year, which was lower than the 0.8% estimate published last month.

But the dip in growth failed to dent the annual rate, with the year-on-year difference between the fourth quarter in 2005 and 2006 remaining unchanged at 3%.

The growth rate for 2006 as a whole was also revised up from the previous estimate of 2.7% to 2.8%, suggesting an imminent interest rate rise to 5.5% may still be on the cards, according to economists.

Investec Securities economist David Page said: “Yes, the headline rate of growth is down a touch on expectations, but the indicators of economic growth remain strong and our view is that the Bank of England will still up interest rates in May.”