The economy expanded by 0.8% between July and September this year, far faster than was predicted.
Economists, analysts and other experts had forecasted gross domestic product (GDP) growth of 0.4%, but data from the Office for National Statistics (ONS) showed a more rapid expansion in the economy.
It follows 1.2% growth in the second quarter of the year, although today's estimate could be revised upwards or downwards as more relevant data becomes available.
Figures were significantly boosted by 4.00% growth in the output of the construction industry. The sector suffered badly at the outset of the year as bad weather meant jobs were put on hold or cancelled.
This backlog of work has boosted construction activity in the second and third quarters of the year. There was also growth in the production and service industries, both of which recorded 0.6% growth. These latest figures mean the GDP increased by 2.8% in the third quarter of 2010 compared with the same period last year.
Better than expected growth will be welcomed by the coalition Government, although the effects of its large scale cuts will take longer to emerge. Sterling rose to 1.1383 against the euro and 0.9 per cent to $1.5870 against the US dollar after the news.
"These figures will refresh hopes that the UK will avoid the much maligned double dip, but we are going to have to wait until 2011 to see what impact spending cuts and tax hikes will have on the pace of economic growth," said Mark Bolsom, head of UK trading desk at Travelex Global Business Payments.
"Having said this, we are going into the programme of cuts in a much better position than most people had hoped for, which is encouraging."
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