Output: Growth boost for Osborne

Chancellor George Osborne's recovery plans received a welcome boost yesterday with better than expected third quarter growth figures and a crucial upgrade for the UK economy.

Gross domestic product (GDP) grew by 0.8 per cent between July and September – less than the 1.2 per cent surge in the previous three months, but double the growth predicted by most economists.

The data ease fears of a double dip recession and will reinforce government hopes the private sector will pick up the slack created in the economy by mammoth public spending cuts.

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Following the release, ratings agency Standard & Poor's revised its outlook on the UK to stable from negative and confirmed the UK's AAA rating.

Mr Osborne said: "What you see today, in an uncertain global economic environment, is Britain growing, growing strongly, the strongest growth we have seen in this part of the year for a decade, and also our country's credit rating being secured.

"That is a big vote of confidence in the UK and a vote of confidence in the coalition Government's economic policies," he added.

"I think that will underpin confidence in the recovery going forward."

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