BRITAIN'S recovery has been more fragile than first thought with revised figures for July to September showing weaker annual growth of 2.6 per cent compared to the previously predicted 3.0 per cent.
In contrast, America's economy in the third quarter grew faster than first thought; 5.0 per cent as opposed to 3.9 per cent. This was the fastest pace for more than a decade and was put down to stronger consumer and business spending.
Data from the Office of National Statistics also presented more bad news for Chancellor George Osborne, showing the UK's current account deficit widened in the third quarter to £27 billion, putting the difference between the country's export and import of goods and services at a record 6.0 per cent of GDP.
"The stark revision in annual growth confirms that the pace of recovery is slowing," said David Kern, chief economist at the British Chambers of Commerce. "The most concerning aspect of these figures is that the current deficit has risen to an unsustainably high level," he warned.
The revisions mean the UK's much-lauded recovery is not as far advanced as previously thought with the economy now 2.9 per cent bigger than its pre-recession peak in 2008 rather than 3.4 per cent.
Figures also showed that household spending increased by 0.9 per cent in the third quarter of 2014, its strongest rate since the second quarter of 2010, and which accounted for the lion's share of GDP growth in the period.
But the data is likely to add to concerns about the unbalanced nature of the recovery with business investment, though ahead year-on-year, contracting by 1.4 per cent over the quarter; its worst performance since the second quarter of 2009.
Last night, Labour's Shabana Mahmood, the Shadow Treasury Minister, seized on what she called were "concerning figures".
The Birmingham MP said: "Growth has been revised down for five of the last six quarters, exports continue to disappoint and business investment fell in the last quarter.
"The Chancellor has totally failed to rebalance the economy as he promised and working people are still not feeling the recovery with wages sluggish and average earnings in real terms down £1,600 a year since 2010."
Ms Mahmood added: "Labour's economic plan will ensure we earn our way to rising living standards for all, not just a few. Alongside sensible spending cuts and ensuring those with the broadest shoulders make a greater contribution, that's the way to get the deficit down in a tough but balanced way."
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