01/10/2015 00:01 BST | Updated 30/09/2016 06:12 BST

CBI Reports Slight Fall In GDP Over Last Quarter

UK economic growth eased back last month after manufacturing stalled for the first time in almost two-and-a-half years, according to new figures.

The CBI's latest growth indicator signalled a slight fall in gross domestic product (GDP) in the three months to September following a near record breaking August.

But the figures suggest growth remained robust overall in the third quarter.

The survey of 775 respondents across the manufacturing, retail and service sectors showed a balance of 22% in September, falling back from the 31% recorded in August and a long-run average of 4%.

Firms also said they are expecting strong expansion in activity over the next three months.

Rain Newton-Smith, CBI director of economics, said the overall picture is healthy, but cautioned manufacturers are being hit and could suffer further if the China slowdown impacts on global demand.

Figures from the CBI earlier this month showed UK factory output stalled over the three months to September - the first time the sector failed to expand since January 2013.

She said: "While for most businesses the next three months are looking upbeat, some manufacturers are having a tough time. The strength of the pound is hitting exports to the eurozone, and emerging markets have lost some of their sparkle.

"Even though the UK's direct exposure to China is small, there is a risk that the impact on global growth from a further slowdown in the world's second-largest economy could bear down on UK trade even more than we expect."

Most economists are expecting GDP in the third quarter to slow, perhaps to 0.5%, down from 0.7% in the previous three months.

But figures released by the Office for National Statistics on Tuesday revealed the economy is now estimated to be 5.9% above its pre-recession peak, compared to initial estimates of 5.2%, after revisions meant the UK emerged from recession more strongly than previously thought.

It said growth was stronger between 2011 and 2013 than previously thought and the economy passed its pre-downturn peak in the second quarter of 2013, one quarter earlier than previous estimates.