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Consumer spending drives UK expansion

UK HOUSEHOLD spending rose by 0.8 per cent in the first quarter, official figures have shown, highlighting the extent to which consumers continue to drive the recovery.

The jump in consumer spending was revealed in figures published yesterday by the Office for National Statistics, which confirmed UK gross domestic product rose 0.8 per cent in the opening three months of 2014.

The ONS figures showed business investment, which had been disappointingly weak for an extended period as the economy battled to stage a recovery, rose 2.7 per cent quarter-on-quarter.

The rise in business investment continued a stronger run in recent quarters, and raised hopes among economists that the recovery might at last be becoming more balanced.

UK economic output in the first quarter, in spite of the growth, was 0.6 per cent adrift of its peak in the opening three months of 2008, ahead of the recession, it was noted by consultancy Capital Economics.

But spokesman Samuel Tombs said: "We continue to expect the recovery to broadly maintain its current pace over the coming quarters. Indeed, we continue to expect GDP to grow by about three per cent both this year and next."

A survey published yesterday by the Confederation of British Industry showed continuing strong growth in UK manufacturers' output.

Firms expect even stron-ger growth in output in the coming three months, in spite of the recent rise in sterling and challenges in eurozone markets.

The survey signalled manufacturers' order books were in good shape.

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