The UK economy grew slightly faster than expected in the first three months following the European Union referendum, official figures released on Friday (23 December), showed.

According to the Office for National Statistics (ONS), Britain's gross domestic product (GDP) grew 0.6% on a quarterly basis in the three months to the end of September, slightly ahead of the 0.5% analysts expected.

More business news

The figure was also marginally higher than the 0.5% advance recorded in the second estimate of quarterly GDP, released last month.

Meanwhile, the year-on-year reading showing Britain's economy expanded 2.2% in the third quarter, down from the 2.3% reading recorded in the corresponding period in the previous year, which had remained unchanged in last month's report.

"Robust consumer demand continued to help the UK economy grow steadily in the third quarter of 2016," said Darren Morgan, the ONS head of GDP. "Growth was slightly stronger than first thought, though, due to greater output in the financial sector."

Last month, the Chancellor Philip Hammond delivered his first Autumn Statement indicating the Office for Budget Responsibility forecast economic growth of 2.1% for 2016 and 1.4% in 2017, down from an initial estimate of 2.2%.

The UK economy is forecast to expand 1.7% in 2018, rather than the expected 2.1% and by 2.1% and 2.0% in the following two years. The original forecast for 2019 and 2020 called for growth of 2.2% and 2.1% respectively.

Howard Archer, chief UK economist at IHS Global Insight, said the revised figures highlighted Britain still faced a decline in growth next year.

"Despite seeming ongoing resilience at the end of 2016, 2017 is likely to be an increasingly difficult year for the UK economy," he said.

"We expect GDP growth to slow markedly to 1.3% in 2017 – as consumer fundamentals weaken markedly and business uncertainty is heightened by the government triggering article 50 to formally start the UK's exit from the European Union. Businesses are expected to become increasingly cautious over investment and employment."

Brexit