LONDON, (Reuters) - Britain's economy likely expanded by 0.5 percent in the final three months of last year, slowing slightly from the third quarter, the National Institute of Economic and Social Research said on Wednesday.

It estimated Britain's economy grew 2.0 percent in 2016 compared with 2.2 percent during the previous year, in line with the long-run potential growth rate of the economy.

But it warned growth over the last year has been unbalanced, led by consumer spending.

"Consumers face significant headwinds this year and next, not least the increase in consumer price inflation that is a


consequence of pass through from the depreciation of sterling in 2016," NIESR senior research fellow James Warren said.

A Reuters poll of economists published last month suggested British economic growth will roughly halve this year to 1.1 percent.

((Reporting by Andy Bruce, editing by David Milliken))

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