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UK economy growing, but slower than expected

The UK economy grew  by 0.2% in the second quarter of 2011, according to the Office for National Statistics.

Gross Domestic Product (GDP) grew by 0.5% in the previous three months, but contracted by 0.5% in the last three months of 2010.

The ONS said growth had been slowed by the extra bank holiday and other one-off factors like the Japanese earthquake and tsunami.

The ONS said: "It is not possible to state precisely what the net overall impact of these special effects might have been. Analysis that we have carried out indicates that Q2’s special events may have had a net downward impact on Q2 2011 GDP of 0.4 in the services sector and 0.1 in the production sector.

"These estimates are broad brush and illustrative. There can be no certainty as to the impact of the special events and there may be other factors at play."

Asked about accusations that government cuts were going too far, too fast, Chancellor of the Exchequer George Osborne told Sky News: "We've seen today the economy is growing, there's underlying growth in the economy. That is creating jobs.

"And here in Britain we've got a plan that has provided stability in a very unstable world and has brought our interest rates down and that has helped the economy grow."

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