UK economic growth rises to 0.6% in second quarter

The figure was in line with market expectations, and is up from 0.3% growth in the previous quarter.

Output grew in all of the construction, manufacturing and services sectors the Office for National Statistics said.

It is the first estimate for growth during the second quarter of 2013, and is based on about 44% of actual data on economic activity.

"These figures are better than forecast," said Chancellor George Osborne. "Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend - but there is still a long way to go and I know things are still tough for families."

The shadow chancellor, Ed Balls, welcomed the growth figure "after three wasted and damaging years of flat-lining", but warned that "families on middle and low incomes are still not seeing any recovery in their living standards" because wage rises were failing to keep up with increases in prices.

Broad-based recovery

The figures mean that the economy has now recouped almost half of its total 7.2% contraction during the 2008-09 recession, with output remaining 3.3% below its pre-recession peak.

The growth figure reflects the seasonally-adjusted increase in output in the second quarter of the year, compared with the first quarter. Compared with the second quarter of 2012, gross domestic product grew by 1.4%.

The recovery was unusually broad-based, with the agriculture and production sectors both turning in positive growth, alongside services and construction.

The services sector grew 0.6% in the three-month period, compared with the previous quarter, and was just 0.2% below the peak level it recorded in early 2008.

The sector is the largest component of the UK economy - constituting about 80% of output - and made the largest contribution to the overall growth figure.

Within services, business was particularly strong in the hotels, restaurants and distribution according to the ONS, expanding 1.5% in the quarter, on top of 1.2% growth in the first three months of the year.

Construction bounced back 0.9%, but still remains 16.5% below its peak, while manufacturing was up 0.4%, but still 10.2% short of its pre-recession level.

The growth figure was in line with market expectations, and share prices on the London Stock Exchange did not react to the news.

However, the pound did drop just under half a cent against the dollar to $1.533, indicating that some market participants believed the data may support further monetary stimulus by the Bank of England.

The Bank is next due to discuss monetary policy on 1 August.

Of potentially greater significance will be the publication of the next inflation report on 7 August, which is when the Bank has said it will begin issuing "forward guidance" - a soft commitment as to how long it will keep interest rates at their current historic low of 0.5%.