The Treasury is facing calls to cut its economic growth forecast for 2005 after figures showed a decline in mortgage lending and business investment.

Ahead of his pre-Budget report next week the chancellor was also told by the CBI his prediction of 3-3.5 per cent expansion is "distinctively optimistic".

But any move by Gordon Brown to downgrade his estimate will put more pressure on his golden rule on government borrowing.

A Treasury spokesman insisted "the UK continues to enjoy the longest period of sustained economic growth on record".