Britain has avoided falling into its third recession since the 2008 global financial crisis, after the economy grew by a better-than-expected 0.3% in the first quarter of 2013 compared with the final three months of last year, official data showed on Thursday.
In a major boost to Prime Minister David Cameron's coalition government, the Office for National Statistics revealed that British GDP expanded by 0.3% in the January-March period.
That marked a rebound from the fourth quarter of 2012, when the economy shrank by 0.3%, the ONS added in a statement.
The technical definition of recession is two successive quarters of contracting economic activity.
Today's figures are an encouraging sign the economy is healing, said finance minister George Osborne. Despite a tough economic backdrop, we are making progress the Chancellor of the Exchequer added in a statement.
In reaction to the impressive growth, the British pound rallied to a three-week high against the Euro and a two-month peak against the dollar.
The positive GDP figure comes after Fitch last week stripped Britain of its top triple-A rating, moving it down one notch to 'AA+' amid fears that the government's austerity program was hurting economic recovery.
The downgrade comes two months after rival ratings agency Moody's also stripped Britain of a triple-A debt rating, saying government debt was still mounting and that growth was too weak to reverse the trend before 2016. Downgrades can cause a country to pay higher interest for its debt.
The ONS added that Britain's economy expanded by 0.6 percent in the January-March period compared with the first quarter of 2012. Growth was driven by a solid services sector, which grew by 0.6% in the first quarter thanks to strong performance by the retail, hotel and restaurant industries. The production sector expanded 0.2%, while the construction industry slid 2.5%.