The UK economy grew almost twice as much as economists forecast in the second quarter in the fastest expansion for four years as rebounding services, manufacturing and construction ignited the recovery.
Gross domestic product rose 1.1 per cent in the three months through June after increasing 0.3 per cent in the previous quarter, the Office for National Statistics said in London today.
Economists forecast a 0.6 per cent gain, according to the median of 32 predictions in a Bloomberg news survey.
Britain's growth pickup may sharpen the divide among policy makers as the Bank of England considers whether the economy faces a greater threat from inflation or needs more stimulus to avert a further recession. The nation is enduring the deepest budget squeeze since World War II while facing a debt crisis in the euro region, its biggest trading partner.
"It's a very encouraging sign that the recovery is establishing itself, strengthening and broadening," Neville Hill, an economist at Credit Suisse Group AG in London and a former UK Treasury official, said in a telephone interview.
"Looking forward, the issue is not so much what's happening inside the UK but outside it. This is more than strong enough to withstand the kind of fiscal tightening we're going into."
Britain is the first of the Group of Seven nations to report second-quarter GDP and today's estimate is the first of three. The statistics office uses data for the first two months of the period from about 40 percent of companies assessed, or about 40,000 businesses, and three-month figures for a further 20,000 firms.
Services, which make up 76 per cent of GDP, grew 0.9 per cent on the quarter, the most since 2007, the statistics office said. Manufacturing jumped 1.6 per cent, the largest increase since 1999, and the 6.6 per cent surge in construction was the biggest since 1963. The building industry contracted in the first quarter of this year particularly because of cold weather.
Chancellor of the Exchequer George Osborne "welcomed" today's growth figures "with cautious optimism" at a Cabinet meeting this morning, British prime minister David Cameron's spokeswoman Vickie Sheriff told reporters in London.
Bloomberg