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UK economy slips back as trade weakens

By Roger Baird

The UK economy grew by 2.2% last year, slipping back from 2.9% in 2014 due to weaker trade and construction output, a report said.

The National Institute of Economic and Social Research forecast growth in the last three months of 2015 of 0.6%, unchanged from its estimate for the three months to November.

This means there is little pressure on the Bank of England to raise interest rates from the rock-bottom low of 0.5% when the Monetary Policy Committee meets tomorrow.

The US Federal Reserve raised rates in America last month for the first time in nearly a decade.

Last month, the Office for National Statistics (ONS) revealed shock revisions that showed growth of 0.4% in the third quarter to the end of September, down from the initial estimate of 0.5%.

Growth was also revised down to 0.5% for the second quarter to the end of June, from the 0.7% previously recorded.

These revisions came as official data last month also revealed worse-than-expected borrowing in November, up by £1.3bn year-on-year to £14.2bn.

ONS data also showed in the third quarter the construction sector was a drag on gross domestic product growth, contracting 1.9%.

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