Chancellor George Osborne claimed Britain was “on the path to prosperity” last night as official figures showed the economy grew at its fastest pace in three years in the third quarter.
The 0.8% upturn in gross domestic product (GDP) was the best performance since the second quarter of 2010, including a 2.5% surge in the construction sector, which has been bolstered by government initiatives such as Help to Buy.
It is also the first time in three years that growth has improved for three quarters in succession, figures from the Office for National Statistics showed.
Last night one analyst claimed Britain was “booming” once again.
But the Federation of Small Businesses (FSB) said firms still face significant challenges in the months ahead.
Andy Willox, FSB’s Scottish policy convener, said: “FSB research shows that small businesses across the UK are increasingly confident about their prospects for growth.
“Today’s figures show that this confidence isn’t misplaced.
“Scottish small businesses continue to cite rising overheads – such as the cost of fuel, finance and utilities – as barriers to their success and we’re urging action on these fronts to accelerate the recovery.
“We must also remember that the benefits of this growth won’t be felt in all parts of Scotland. Government at all levels must remember that small enterprise will be critical to creating jobs and driving growth in these areas.”
The size of the economy remains 2.5% off the pre-recession peak of early 2008 and there were warnings that the pace of growth could start to tail off.
Economists fear a continued squeeze on wages and rising household energy bills threaten consumer purchasing power.
But for Mr Osborne, it was another boost at the end of a week when figures showed that stamp-duty revenues helped public borrowing come in £1billion lower in September.
“This shows that Britain’s hard work is paying off and the country is on the path to prosperity,” he said.
Prime Minister David Cameron added: “Today’s encouraging GDP growth figures are another sign we are turning a corner.”
Shadow chancellor Ed Balls said: “For millions of people across the country still seeing prices rising faster than their wages, this is no recovery at all.”
The new figures showed the economy grew by 1.5% over the last year, an improvement on the year-to-year rise of 1.3% in the second quarter. The International Monetary Fund is predicting full-year growth of 1.4% for 2013.
Chris Williamson, chief economist at Markit, said: “Britain is booming again, with the economy showing the most sustainable and robust-looking upturn since the financial crisis.”