The official estimate for the UK economy's growth rate last year has been revised downwards from 1.7% to 1.6%, the lowest figure since 1992.

New figures from Office for National Statistics (ONS) cut the original estimate following slightly slower growth of government spending than originally thought.

The figures also showed lower growth in the hotels and restaurants sector during the last three months of 2002.

Recent signs of further weakness in the UK economy have raised speculation that the Bank of England may have to cut interest rates again.

The ONS said the economy grew by an unrevised 0.4% in the October to December period last year, compared with the quarter before.

However, growth compared with October to December 2001 was revised down slightly to 2.1% from 2.2%.

Forecasts under focus

During his pre-Budget report last November, Chancellor Gordon Brown set a growth target of 1.6% for 2002, revising down the previous forecast of between 2% and 2.5%.

On Thursday Mr Brown is set to be grilled on his growth forecasts when he appears before the Treasury select committee.

The pre-Budget report predicted the economy would grow by 2.5%-3.0% this year, hitting 3.0%-3.5% in 2004.

But some observers have said these are too optimistic, and earlier this month the Bank of England reduced its 2003 forecast from 3% to 2.5%, and predicted 2% growth in 2004.

Consumption growth to slow?

The latest GDP figures showed the UK economy was still divided at the end of last year.

Consumer spending grew by 1% during the October to December quarter, while manufacturing output fell by 0.9%, and total investment fell by 0.6%.

But there was as sign in the numbers that consumer spending could be about to slow according to Ross Walker, UK economist at Royal Bank of Scotland.

The final quarter of 2002 saw a large rise in inventories held by firms.

Mr Walker said the stock build up most likely indicated that producers had not been able to sell their goods, which could signal a slowdown in consumption growth over the coming months.