The British economy has defied expectations of a sharp slowdown by growing twice as much as predicted in the last quarter.
The country’s GDP expanded by 0.8%, as opposed to the 0.4% predicted by economists, causing the prospect of a double dip recession to recede.
The latest figures, for the July to September quarter, mean the government’s austerity cuts of £81 billion announced last week should have less of an impact than previously feared and also diminishes the chances of the Bank of England pumping more cash into the economy.
The news caused the pound to strengthen sharply against the dollar to $1.58 while it is now worth €1.14.
Despite the better-than-expected growth, it is a reduction from the second quarter when the economy grew by 1.2% as the country emerged from recession.