• ONS: UK GDP growth slower than thought over nine months • Third-quarter estimate revised to 0.7% from 0.8% • Second-quarter growth put at 1.1% from 1.2% • First-quarter growth down to 0.3% from 0.4%

This article is more than 9 years old

This article is more than 9 years old

Britain's economy grew less rapidly than thought over the past nine months, raising fears over the strength of the UK's recovery from recession.

The Office for National Statistics revised down its previous estimate for GDP growth between July and September to 0.7%, from 0.8%. It also cut its estimate for annual growth in the UK economy during the quarter to 2.7%, from 2.8%.

Economic growth was also trimmed back by 0.1 percentage points in both the first and second quarters of 2010, to 0.3% and 1.1% respectively.

The ONS said the construction, services and production sectors had all shown slower growth than originally thought in the third quarter of 2010. It also revised down the output of business services and finance companies.

Today's data showed that imports grew faster than exports in the last quarter, dealing a blow to hopes that Britain was exporting its way to recovery.

"The upshot is that a continued strong recovery seems far from assured," commented Vicky Redwood of Capital Economics.

The original estimate of 0.8% growth in the third quarter of 2010 was twice as strong as City analysts had expected, and annual growth of 2.7% remains above the long-term average. But with Britain's public sector borrowing hitting a record high yesterday, today's revisions did disappoint some in the City – sending the pound down to a three-month low of $1.5426 against the dollar.

Economists warned that economic growth will continue to slow in the current quarter, especially given the disruption caused by the recent bad weather.

"We currently forecast GDP growth to moderate to 0.5% quarter-on-quarter in the fourth quarter, which would result in overall GDP growth of 1.7% for 2010. However, there are now serious downside risks to this forecast and it may well now prove too optimistic given the serious hit to economic activity in December coming from the severe weather," said Howard Archer, chief European and UK economist at IHS Global Insight.

Philip Shaw of Investec agreed that GDP growth has softened in the last three months, but added that GDP growth for 2010 will still exceed most expectations at the start of the year.

George Buckley of Deutsche Bank was encouraged that this morning's data showed a rise in the savings ratio.