LONDON Britain's recovery from financial crisis sped up and spread through the economy in the second quarter, giving a boost to the government and to a swathe of companies which increased sales and profits.
The pace of quarterly economic growth doubled to 0.6 percent between April and June, a contrast with worries just a few months ago about a return to recession.
Spending by consumers and businesses helped make the country's massive service industry once again the biggest driver of gross domestic product, leaving the government still waiting for its hoped-for recovery of manufacturing and exports.
For now at least, many Britons do not seem too worried about wages growth, which has been outstripped by inflation.
On top of a feel-good mood after a string of British sporting successes - in tennis, cricket, rugby and cycling - and the birth of a new royal baby, a heat wave in July has helped push up summer sales at British pub chains.
"After five years, people are seeing that Armageddon has been narrowly avoided and while they realise the economic world is precarious, life is going on," Tim Martin, chairman and founder of JD Wetherspoon pubs, told Reuters.
Telecoms provider BT Group said it saw higher demand from small and medium-sized companies.
And rising construction and housing activity, boosted by a government scheme to allow more people to buy their own home, has given a fillip to house builders and suppliers, with Travis Perkins and Howden Joinery the latest to report higher first-half profits on Thursday.
The chief executive of Travis Perkins, Geoff Cooper, warned however that the recovery would be precarious while living standards remained under pressure.
"While we've got wage awards below inflation I think consumers will always be quite cautious about where they spend their money," he told Reuters.
Thursday's data showed that the second quarter was the first time that all the four sectors of Britain's economy - agriculture, industry, construction and services - grew since the July-September period of 2010.
Compared with a year earlier, GDP expanded 1.4 percent, faster than the 0.3 percent rise in the first quarter. It was the fastest increase since early 2011 although it was boosted by an extra working day in the April-June period this year.
The numbers were a political boost for Chancellor George Osborne, who has fended off calls from the International Monetary Fund to spend more to speed up growth and criticism of his plans to provide more stimulus for the housing market.
"Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend - but there is still a long way to go and I know things are still tough for families," Osborne said in a statement.
"So I will not let up in my determination to make sure we put right all that went wrong in our economy."
Growing signs of a recovery have coincided with a narrowing in some opinion polls of the lead of the opposition Labour party over the Conservatives of Prime Minister David Cameron.
Labour conceded that the second-quarter growth was welcome but said it was long overdue. It kept up its calls for the government to bring forward spending on infrastructure.
"This is also the slowest recovery for over 100 years," said Ed Balls, the party's would-be chancellor. "Simply to catch up all the ground we have lost under David Cameron and George Osborne, we would need growth of 1.3 percent each quarter over the next two years."
Britain's economy is faring better than many others in Europe but it does still remain 3.3 percent smaller than before the 2008-09 recession, and it is likely get some more nurturing by the Bank of England as soon as next month.
In early August, the central bank under Mark Carney, the new governor, is expected to start providing detailed guidance on how long interest rates will remain low, an effort to encourage consumers to spend and businesses to borrow and invest.
Sterling weakened and British government bonds outperformed their German counterparts as some investors had been betting on stronger growth, which would have reduced further the chance of the Bank pumping more money into the economy.
Thursday's data showed that output in Britain's service sector - which makes up 78 percent of GDP - rose by 0.6 percent in the second quarter after ticking up 0.5 percent in the first three months of the year.
Services provided the strongest contribution to overall growth, adding 0.5 percentage points, with the retail, hotels and restaurants and the business services and finance components accounting for the bulk of the increase.
Industrial output was 0.6 percent higher compared with the first quarter but remained down in yearly terms. Construction - which now accounts for around 6 percent of GDP after shrinking sharply after the financial crisis - expanded by 0.9 percent from the January-March period, disappointing some economists who had expected stronger growth from the sector.
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