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'Britain coming back' boast as economy grows

George Osborne has insisted "Britain is coming back" after figures showed the fifth successive quarter of growth, placing the country on the cusp of surpassing its pre-crash peak.

But Shadow Chancellor Ed Balls insisted "millions of hardworking people are still feeling no recovery at all" while Stewart Hosie, the SNP's deputy leader in Westminster, said the figures, given the deficit, debt and borrowing were all higher than the Chancellor's 2010 targets, were "more evidence Tory economic policies have stalled and delayed the recovery".

However, with the economic indicators beginning increasingly to move into more positive territory and with just over a year to go before the next General Election, the Conservative-led Coalition appears increasingly confident the political momentum is with it and not Labour.

Official figures showed growth for the first quarter of 2014 was up 0.8%, slightly below City expectations of 0.9%, but which means on an annualised basis GDP is 3.1% up on the same period for 2013. Growth is now just 0.6% below its pre-recession level of 2008, which is likely to be surpassed when the next statistics are published in July.

The First Quarter number meant this was the first time there had been five successive quarters of growth since 2007.

Mr Osborne hailed the data as a vindication of his economic policies; a year after a dire warning from the International Monetary Fund about the impact of his austerity programme.

"Today's figures show Britain is coming back," he told MPs. "But we can't take that for granted. We have to carry on working through our long-term economic plan."

Economists described it as a "Goldilocks" scenario - not too hot, not too cold but just right - -with growth solid but not strong enough to stoke inflation fears or prompt a hike in interest rates.

The figures showed:

l If the volatile impact of oil and gas production were excluded, the economy had surpassed its pre-crisis peak and was already 0.3% ahead in the first quarter.

l Manufacturing was up 1.3%, its strongest quarterly performance for nearly four years;

l The powerhouse services sector, representing 75% of the economy, grew by 0.9%.

l Construction expanded 0.3%.

Year-on-year comparisons showed manufacturing was up 3.4%, construction up 5.1% and services - a sector that has already recovered to pre-recession levels - was up 3%. However, manufacturing remains 7.7% below its pre-crisis peak while construction is still 12.2% behind.

Mr Balls, while welcoming the growth figures, said: "Under this Government, wages after inflation are down by over £1600 a year. On top of this, tax and benefit changes will leave families almost £1000 a year worse off by the time of the next election.

"With business investment still weak, infrastructure output down and housing demand outstripping housing supply, this is not yet a recovery that is built to last."

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