UK economy roars ahead with fastest growth in 3 years

Kingdom Of Great Britain

Britain's economic growth picked up pace in the third quarter of 2013, boosting hopes that the country's nascent recovery is becoming more entrenched.

The U.K.'s third-quarter gross domestic product (GDP) grew by 0.8 percent from the second quarter, according to official data from the Office for National Statistics released on Friday - its fastest growth since 2010.

The figure - which was in line with forecasts in a Reuters poll - marked a pick-up in economic expansion from the April-June period, when it came in at 0.7 percent. The year-on-year growth rate, of 1.5 percent, also met expectations.

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Martin McMahon, economist at the Commonwealth Bank of Australia, said the data demonstrated the strength of Britain's economy.

"It's roaring ahead, really, and you would expect growth to become more broad-based from here, going through in the second-half of the year," he told CNBC after the release of the figures.

Sector breakdown

Friday's data revealed that Britain's dominant services sector continued to steam ahead, with growth of 0.7 percent from the second quarter, and manufacturing increased by 0.9 percent for the second consecutive quarter.

Construction output, meanwhile, increased by 2.5 percent in the third quarter compared with the previous three months - the strongest in more than three years as house building got a boost.

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The figures serve to highlight the substantial recovery seen by Britain over the last 12 months. GDP in the third quarter of 2013 was 1.5 percent higher compared with the same quarter a year ago.

It comes after a slew of positive economic news for the U.K., including healthy business surveys for the services, manufacturing and construction sectors. Retail sales have also picked up, rising by 2.8 percent on an annual basis in September.

Lagging behind?

The director general of the British Chambers of Commerce, John Longworth, also welcomed the GDP data, saying there was "much to be optimistic about."

"This is the highest quarterly increase we've seen in three years, so the economy is clearly moving in the right direction," he said in a note.

(Read more: UK economy 'needs more time to recover' )

"But we are still behind a number of advanced economies such as the U.S. and Germany that have managed to recover the output lost during the economic downturn."

Economic growth in Britain remains 2.5 percent below the peak seen in the first quarter of 2008, before the economic crisis took hold, meaning there is still "a long way to go," according to financial services firm KPMG's Chief Economist Andrew Smith.

"There is little evidence - to date - of the desired economic rebalancing away from debt fueled consumption towards investment and export led growth," he said in a note. "That said -- given the disappointments of the past few years -- expansion of any type should be welcomed. And, more encouragingly, the data so far this year indicates the recovery has been pretty broad based with construction, manufacturing and services all contributing."

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