Britain's strongest growth in more than three years has provided a foretaste of the looming general election battle as the Conservatives and Labour clashed over the state of the economy.
David Cameron and George Osborne seized on a second successive set of strong growth figures which showed that expansion in all four sectors of the economy produced a 0.8% jump in national output. The chancellor said the UK was "on the path to prosperity".
Ed Balls, the shadow chancellor, said the pickup was long overdue and was "no recovery at all" for the millions of people seeing prices rise faster than wages.
The political battle over growth was prompted by official figures registering the fastest pace of expansion since the spring of 2010, the period just before and after the last general election. Output grew by 1.5% in the latest 12 months, but remains 2.5% below the peak reached in early 2008, before the most severe recession of the post-war era.
In the subsequent 18 months, gross domestic product fell by 7.2% and the stop-start recovery that followed has been the slowest of modern times. The quarterly growth figure was in line with City forecasts and analysts believe the economy will continue to expand in 2014. Most are expecting national output to increase by about 1.5% in 2013 and 2.5% next year.
Cameron and Osborne took to Twitter to hail the performance of the economy. "Today's encouraging GDP growth figures are another sign we are turning a corner," said prime minister, while the chancellor said: "This shows that Britain's hard work is paying off and the country is on the path to prosperity."
Liberal Democrat members of the coalition were more cautious. Vince Cable, the business secretary, said more needed to be done to address the lack of bank lending to business. "We've always said the road to recovery would be a marathon, not a sprint," he said.
Nick Clegg, the deputy prime minister, said he could understand why people did not feel the economy was getting stronger.
Speaking on BBC Radio 2's Jeremy Vine show, Clegg said: "For many people this doesn't feel like a recovery until they feel actually they have got more money in their pocket and they don't feel under so much pressure from the bills they have to pay every week and every month."
Recent announcements of hefty increases in energy bills have led to renewed fears about the impact of rising prices on living standards, and Balls said that working people were on average £1,500 worse off since the coalition came to power three years ago.
"After three damaging years of flatlining, it's both welcome and long overdue that our economy is growing again. But for millions of people across the country still seeing prices rising faster than their wages this is no recovery at all." The shadow chancellor said that on the cost of living, growth and reducing the UK's budget deficit, the government had failed every test it had set itself since 2010.
John Longworth, director general of the British Chambers of Commerce, said: "This is the highest quarterly increase we've seen in three years, so the economy is clearly moving in the right direction. Our own surveys have consistently shown that businesses are confident and recent economic data has been positive, so we have much to be optimistic about. But we are still behind a number of advanced economies such as the US and Germany that have managed to recover the output lost during the economic downturn.
"Much more needs to be done to transform our economy from being good to being really great. Businesses are in desperate need of better access to finance, and trade promotion has to be prioritised so that firms who are looking to do business overseas are able to take that first step towards exporting."
Frances O'Grady, the TUC general secretary, said: "It's good that growth is back, but the real test for the government is whether the proceeds will be fairly shared and used to tackle the living standards crisis. If the recovery only flows to the better-off residents of London and the south-east then today's news will make little difference to most people.
Agriculture, industrial production, services and construction all recorded growth in the third quarter, the ONS said. The service sector – which accounts for almost 78% of the economy – has now more than made up the ground lost during the slump of 2008-09, while construction and industrial production are 12% down on their pre-recession levels.
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