Growth could slow in 2003

This was because financial services and transport and storage performed more strongly than first thought, according to the Office for National Statistics (ONS).

It said the economy grew by 2.2% in the last three months of the year compared with a year earlier, slightly higher than was estimated in February.

And the figure for the whole of the year was revised up to 1.8% from 1.6%.

He (the Chancellor) is going to have to revise his growth outlook again on 9 April Philip Shaw, Investec

That makes the growth in the economy during 2002 slightly better than Mr Brown's forecast of 1.6%, given in November's pre-budget report.

He has pencilled in growth of 2.5% to 3% in 2003 but analysts think he might have to revise that figure in April's Budget.

'Too optimistic'

Philip Shaw, chief economist at Investec is predicting growth of 2.1%.

"Last year was not particularly encouraging but it could have been a lot worse without the interest rate cuts by the Bank of England.

"We think 2.5% is looking increasingly optimistic. He is going to have to revise his growth outlook again on April 9."

The change to the GDP figures was the second revision by the ONS.

The figure for growth between the third and fourth quarters of 2002 remained unchanged at 0.4%.