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Last Updated: Friday, 24 November 2006, 10:48 GMT
Chancellor set to re-do his sums
Gordon Brown
The UK economy is growing faster than the Chancellor expected
UK economic growth was confirmed at 0.7% in the third quarter, meaning that Chancellor Gordon Brown is likely to raise his growth forecast for 2006.

Office of National Statistics (ONS) data revised the annual growth rate down slightly to 2.7%, above the Chancellor's forecast of 2.0-2.5%.

He is expected to revise his forecast in his Pre-Budget Report on 6 December.

On a worrying note ahead of Christmas, the ONS said consumer spending growth had halved from the previous quarter.

Retail sales were hit between July and October, as consumer spending dropped from a World Cup-boosted 0.9% growth rate in the second quarter to just 0.4%.

"GDP growth now seems to set to come in at around 2.6% for the whole of 2006," said Howard Archer, chief UK economist at Global Insight.

"The Bank of England expects growth to accelerate to 3% in 2007, but we suspect it is more likely to be around 2.5%, as the upside is limited by slower global growth and the significant headwinds facing the consumer."

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