BRITAIN'S economy remains on track to hit the Chancellor's growth targets this year, despite the global slowdown, according to official figures.

Higher household spending helped Gross Domestic Product (GDP) rise by 0.5 per cent in the third quarter of the year and offset further falls in output across manufacturing industries.

The Office for National Statistics (ONS) showed activity in the manufacturing sector fell at the steepest annual rate for nearly ten years between July and September.

But analysts said GDP growth of just 0.1 per cent in the fourth quarter should be enough for the economy to meet Gordon Brown's forecast of 2.25 per cent for this year.

Philip Shaw, chief economist at City stockbroker Investec, said: "The consumer is preventing the UK from sliding into a recession."

Household spending rose by 1.1 per cent in the third quarter as shoppers splashed out on footwear, clothing, food and drink.

Registrations of new cars by private buyers rose by nearly 30 per cent in September over the same month last year, the ONS said.

Output in the construction industries also continued to grow strongly while service sector output rose by 0.6 per cent.

Growth in the service sector was strongest in financial services, but the total output in the sector was the lowest since the start of 2000.

Output in the recession-hit manufacturing sector fell by 1.1 per cent, 3.3 per cent below the same period last year, the worst year-on-year fall since the end of 1991.

Annual GDP growth is now running at 2.2 per cent and the ONS revised figures for both the first and second quarters up to 0.7 per cent and 0.5 per cent respectively.