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UK economic growth expected to slow UK economic growth expected to slow
(about 2 hours later)
The UK's economic growth is expected to have slowed over the last three months of 2010, economists have warned.The UK's economic growth is expected to have slowed over the last three months of 2010, economists have warned.
The GDP figures, due to be released at 0930 GMT, are expected to show growth of between 0.2% and 0.6% in the three months up to December.The GDP figures, due to be released at 0930 GMT, are expected to show growth of between 0.2% and 0.6% in the three months up to December.
There was 0.7% growth in the previous three months and 1.1% in the second quarter of 2010.There was 0.7% growth in the previous three months and 1.1% in the second quarter of 2010.
The government says the figures are evidence that the UK is on the road to recovery. Business Secretary Vince Cable said the bad weather at the end of last year was likely to depress the latest figures.
"There is a reasonable consensus that this is a pretty bad quarter for reasons that are primarily to do with climate," he told BBC Radio 4's Today programme.
"[The weather] was very bad and has clearly had a significant effect on construction and other weather-dependent industries."
But he added: "What is apparent is that there is quite strong growth beginning to happen in manufacturing and exports."
Howard Archer, chief UK and European economist at IHS Global Insight, said there was considerable uncertainty over how much December's severe weather hit overall activity.Howard Archer, chief UK and European economist at IHS Global Insight, said there was considerable uncertainty over how much December's severe weather hit overall activity.
As a result, the range of forecasts is wide, from 0.2% to 0.6%.As a result, the range of forecasts is wide, from 0.2% to 0.6%.
The National Institute of Economic and Social Research has projected that output grew 0.5% in the period under review, and the British Chambers of Commerce has forecast a figure of 0.6%. The National Institute of Economic and Social Research has projected that output grew 0.5% in the period under review, and the British Chambers of Commerce has forecast a figure of 0.4%.
The "consensus figure", drawn from a range of forecasters, is that the Office for National Statistics (ONS) will announce a 0.4% increase in growth in the fourth quarter.The "consensus figure", drawn from a range of forecasters, is that the Office for National Statistics (ONS) will announce a 0.4% increase in growth in the fourth quarter.
Debt figuresDebt figures
Business Secretary Vince Cable said a "key driver" of government policy in the last year had been sorting out the public finances.
"We had to do that, and it's been done. Confidence has been restored and we can now set in process the long-term policies that we need to get economic growth," he added.
"And that is about focusing on building up manufacturing, supporting apprenticeships, supporting technological innovation - those are all things we are now doing.
"But it's a long-term project, you know the British economy's been badly distorted for many years, with too much growth focused on the south-east, focused on property, not enough on manufacturing and not enough on exports, and getting that right is a big long-term project."
The Office for Budget Responsibility - set up by the government to make independent forecasts - says the economy will grow by 2.1% this year, slightly more than in 2010.The Office for Budget Responsibility - set up by the government to make independent forecasts - says the economy will grow by 2.1% this year, slightly more than in 2010.
The ONS will also release public borrowing figures for December, which are expected to reveal the nation fell further into debt by the sum of £21bn, meaning a total for the financial year to date of about £125bn of debt.The ONS will also release public borrowing figures for December, which are expected to reveal the nation fell further into debt by the sum of £21bn, meaning a total for the financial year to date of about £125bn of debt.
Sir Richard Lambert, the outgoing boss of the business body, the CBI, had earlier accused the coalition of failing to come up with policies that support economic growth. On Monday, Sir Richard Lambert, the outgoing boss of the CBI business body, accused the coalition of failing to come up with policies that support economic growth.
"It's failed to articulate in big picture terms its vision of what the UK economy might become under its stewardship," he said in a speech."It's failed to articulate in big picture terms its vision of what the UK economy might become under its stewardship," he said in a speech.
Sir Richard said business supported the government's spending cuts, but some politically motivated initiatives were damaging.Sir Richard said business supported the government's spending cuts, but some politically motivated initiatives were damaging.
The government has "taken a series of policy initiatives for political reasons, apparently careless of the damage they might do to business and to job creation", Sir Richard said in his last major speech before his departure on Friday.The government has "taken a series of policy initiatives for political reasons, apparently careless of the damage they might do to business and to job creation", Sir Richard said in his last major speech before his departure on Friday.
'Making matters worse''Making matters worse'
Spending cuts and initiatives such as this month's VAT increase from 17.5% to 20% would help fix the UK's structural deficit over time, Sir Richard said.Spending cuts and initiatives such as this month's VAT increase from 17.5% to 20% would help fix the UK's structural deficit over time, Sir Richard said.
"But to bring the public finances back to full health, they will have to be accompanied by increased output and employment - which bring with them higher tax revenues," he stressed."But to bring the public finances back to full health, they will have to be accompanied by increased output and employment - which bring with them higher tax revenues," he stressed.
"Public spending cuts and private sector growth are two sides of the same coin.""Public spending cuts and private sector growth are two sides of the same coin."
Hence, without initiatives supporting private sector growth, the spending cuts would not only be futile; they would be actively detrimental, he reasoned.Hence, without initiatives supporting private sector growth, the spending cuts would not only be futile; they would be actively detrimental, he reasoned.
Ed Balls, Labour's shadow chancellor, urged the government to heed the warning from Sir Richard.Ed Balls, Labour's shadow chancellor, urged the government to heed the warning from Sir Richard.
"These are damning criticisms from such a respected figure in the business world," he said."These are damning criticisms from such a respected figure in the business world," he said.
Len McCluskey, Unite general secretary-elect, also agreed with Sir Richard's assessment.Len McCluskey, Unite general secretary-elect, also agreed with Sir Richard's assessment.
"It's not often that Unite and the CBI find common ground in criticising the government," he said."It's not often that Unite and the CBI find common ground in criticising the government," he said.
"Sir Richard's views are a major wake-up call for David Cameron and George Osborne; the medicine they're feeding the patient will kill, not cure.""Sir Richard's views are a major wake-up call for David Cameron and George Osborne; the medicine they're feeding the patient will kill, not cure."
Bank of England governor Mervyn King is expected to mention his concerns over inflation in a speech in Newcastle on Tuesday evening.Bank of England governor Mervyn King is expected to mention his concerns over inflation in a speech in Newcastle on Tuesday evening.