Britain’s economy grew Â in the first quarter of 2011 by enough to erase the contraction of the previous three months on the strongest surge in service industry growth for four years.
Gross domestic product rose 0.5% from the final quarter of 2010, when it fell by the same amount, theÂ Office for National Statistics said today in London.
Services expanded by 0.9%, the most since 2006, but construction fared far worse, falling by almost 5%.
The economy’s production level has returned to where it was before the fourth quarter, when the coldest December in a century disrupted business across the country. Bank of England officials are split on whether growth is strong enough to withstand the biggest fiscal squeeze since World War II, allowing them to remove stimulus to fight inflation.
The pound rose more than 0.5% against the dollar after the report and traded at $1.6536 earlier this morning.
“The government has always expected the recovery to be choppy,” the Treasury said in a statement . “But together with continued reminders around the world of the risks facing countries that do not deal with their debts and deficits, today’s data shows that the government has set the right economic course.”
Britain is the first member of the Group of Seven nations to report official growth data for the first quarter. Services, which make up 76% of the economy, expanded after a 1% increase in business services and finance.
U.K. manufacturing increased by 1.1% in the first quarter, driving a 0.4% gain in industrial production. Construction shrank 4.7%, the most in two years, the statistics office said.