Britain’s economy grows at a faster rate than earlier predictions. Revised figures from the Office for National Statistics (ONS) revealed the strongest jump in output from the UK construction sector since the second quarter of 1963.

The 2010 Q2 performance was driven by a sharp rebound following an unusually harsh winter. A spokesman for the ONS said that the upgrade would add 0.1 percentage points to the second quarter's 1.1 per cent GDP growth rate.

Most economists expect a Q2 rate of 1.1 or 1.2% to represent a peak in the pace of recovery before growth slows or even returns to negative territory later this year and next due to impending budget tightening.

Official figures showed GDP in the 16-nation currency zone growing by 1% driven by Germany's biggest quarterly expansion since reunification two decades ago. Positive numbers were also recorded for France, Italy and Spain but Greece saw its economy shrink by 1.5% during the quarter.

Jennifer McKeown at Capital Economics said it was unusual for growth in the eurozone to outpace that in the US but also highlighted concerns about the strength of the recovery in countries such as Greece and Ireland.

Carsten Brzeski, an economist with ING, said the German economy being the largest in Europe will return to more ordinary growth numbers after the impact from the construction sector and normalizing of export growth. He also warned the current growth momentum was unlikely to be sustainable.

According to the revised UK construction data, Q2 output was also sharply higher than a year earlier. Private home-building rose 9% and was 22 per cent stronger over the quarter. Construction accounts for about 6% of total economic output.

The British Chambers of Commerce said the German growth figures highlighted the importance of exports as a component of a sustainable recovery.