UK economy closes in on pre-recession size

Gross domestic product probably expanded by 0.9pc in the first three months of this year from the fourth quarter of 2013, when the economy grew by 0.7pc, according to a Reuters poll of economists.

In year-on-year terms, growth is also expected to have picked up speed to hit 3.2pc, compared with 2.7pc in the fourth quarter.

Britain's population has risen strongly since the financial crisis, meaning that output per head is still well below pre-crisis levels. A near-six-year run of declining wages compared with inflation is only just starting to level out.

Nonetheless, British households are feeling increasingly upbeat about their finances.

Consumer confidence in April hit its highest level since August 2007, helped in particular by rising house prices as well as by higher earnings, according to a survey published on Tuesday by YouGov and the Centre for Economics and Business Research (CEBR).

"Consumer confidence grew at a sluggish rate during the first quarter of 2014, but April's figures suggest that confidence is set to make great strides over the summer," Charles Davis, CEBR director, said.

Despite the turnaround in the economy, the Bank of England has signalled it is in no rush to raise interest rates. Its stance has been helped by the lowest consumer inflation rate in four years.

The central bank has welcomed a long-awaited pickup in business investment as a sign that the economic recovery might be able to reduce its reliance on unsustainable consumer spending.

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