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Britain's economy did not grow as quickly as had been estimated in the final quarter of 2006.

UK GDP fourth-quarter growth was 0.7 per cent, 0.1 per cent less than previous estimates, according to figures from the Office for National Statistics (ONS).

This meant total GDP growth in 2006 reached 2.8 per cent, driven by consumer spending.

Richard Snook of the Centre for Economics and Business Research (Cebr) believes that the 0.1 per cent slip is bad news for chancellor Gordon Brown, who was relying on the 2.8 per cent figures to ensure his growth predictions for 2007 are met.

"This downward revision will make Brown's hugely optimistic growth forecasts even more difficult to achieve," Mr Snook said.

He explained that the lack of stronger growth in the final quarter meant the next three quarters would begin from a lower-than-anticipated base, making Mr Brown's 2.75-3.25 per cent growth predictions unlikely.

Howard Archer of research firm Global Insight suggested that additional factors meant consumer spending would struggle in 2007, further dampening expectations for the UK's performance this year.

"We believe that the upside for consumer spending will be limited by significant headwinds including higher interest rates, relatively moderate real earnings growth, an increasing tax burden and rising debt levels," he said, adding that a strong pound would continue to damage exports in the manufacturing sector.

The ONS also released figures showing that Britain's balance-of-payment deficit increased from £29.2 billion in 2005 to £43.4 billion last year.