Hopes of a sustained recovery were fuelled today after official figures revealed Britain's economy grew by a better-than-expected 0.8% during the third quarter.

The quarter-on-quarter rise in gross domestic product (GDP) was less than the 1.2% surge in the previous three months, but double the increase expected by most experts.

Economic growth over the past six months has now hit 2%, which is the fastest pace of expansion seen over two consecutive quarters for 10 years, according to the Office for National Statistics (ONS).

The ONS says, allowing for a bounce back in the second quarter following the bad weather at the start of the year, the underlying growth between July and September was similar to that of the second quarter.

Year-on-year growth has recovered to levels seen before the recession, reaching 2.8% in the third quarter – the highest annual rate of expansion since 2007.

Government boost

While the figures are only a preliminary estimate and may be subject to change, the initial growth figures are likely to give a boost to Government deficit-busting plans.

Labour leader Ed Miliband yesterday accused the Government of taking a "big gamble with growth" by pushing through deep public spending cuts, but a stronger recovery in the private sector should give Britain a better chance of withstanding austerity measures.

GDP has now grown for four consecutive quarters, but there are fears this will not be sustained as the Government cuts take effect.

Prime Minister David Cameron promised a "relentless focus on growth" yesterday to help fill the hole left by the coalition's austerity measures, expected to cost 490,000 public sector jobs.

Critics doubt the private sector has the capacity Cameron believes it does to take up the slack in the economy.

Recent figures have started to reveal cracks appearing in the recovery, with business activity pulling back and a slowdown in consumer spending hitting retail sales in recent months.

Industry surveys have revealed falling confidence among firms in both the manufacturing and key services, while a weaker-than-expected result for retail sales in September has added to the concerns, with sales slipping 0.2%.

The housing market has also started to falter and Nationwide Building Society figures later this week are expected to show a 0.4% fall in property prices between September and October.

'More resilient'

ING economist James Knightley says the upbeat figures mean a further bout of quantitative easing (printing new money) would be delayed until early next year.

He adds: "This is the second major GDP growth surprise in a row and suggests the UK economy is more resilient than many had feared.

"The Government will no doubt take this as a sign the private sector can fill the gap created by public sector cuts, but with consumer confidence, hiring intentions surveys and housing activity data all softening, we remain cautious."

Chancellor George Osborne says the latest figures should underpin confidence in the economy.

"Today's figures show the economy continuing to grow, at double the rate the market expected and the fastest rate for the third quarter since 1999. Just like the second quarter, the growth is broadly based and the lion's share is coming from the private sector.

"This gives me confidence that although global economic conditions remain choppy, a steady recovery is under way."

The pound strengthened against the dollar and euro following today's better-than-expected figures.

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