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GDP Unrevised At 1% In Third Quarter

(c) Sky News 2012

Britain's gross domestic product for the third quarter has been unrevised by the Office for National Statistics, with growth confirmed at 1%.

The ONS confirmed the strongest rise in household spending in more than two years helped drive the UK's dramatic bounce back to economic growth between July and September.

The second estimate includes figures on the spending side of the economy for the first time, which revealed that the Olympics and Paralympic Games helped household spending grow by 0.6%, the strongest rate since the second quarter of 2010.

The unchanged headline GDP figure remains the fastest rate of quarterly growth in five years and marked the end of the longest double-dip recession since the 1950s.

GDP is seen as a broad measure for the health of the total UK economy.

Although the headline figure was unrevised, it was still largely driven by one-off factors and is unlikely to alter the view that the underlying health of the economy is much weaker.

The third quarter had one more working day than the previous quarter, due to the Queen's Diamond Jubilee, the ONS said.

Looking further ahead, growth is expected to fall back sharply between October and December amid a series of weak purchasing managers' surveys for services, manufacturing and construction industries.

Bank of England governor Sir Mervyn King recently warned that output could even shrink in the fourth quarter.

The economy remains 3.1% below its peak in the first quarter of 2008, the ONS said.

And fourth-quarter output was cut from flat growth to a decline of 0.1%, although this was due to methodology rather than revisions to previous quarters.

The second estimate saw output in the construction sector revised from a 2.5% decline to a steeper drop of 2.6%, while industrial production was downgraded from 1.1% growth to 0.9%.

The services sector grew at 1.3% - unchanged from the previous estimate - as ticket sales for the Olympics and Paralympics were booked in the third quarter.

This was the fastest growth in five years.

A more complete breakdown of household spending will be given in the final estimate next month but the ONS said it was likely driven by ticket sales, hotels and restaurants, and transport.

Elsewhere, new figures revealed an improvement in the UK's trade position during the third quarter with imports falling 0.4% and exports rising by 1.7% when compared with the previous quarter.

However, the rise in exports can partly be attributed to higher spending by foreign tourists during the Olympics as this spending is recorded as an export.

:: Meanwhile, the Organisation for Economic Co-operation and Development has said it expects the UK's national output to shrink by 0.1% this year.

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