UK GDP (gross domestic product) increased by 0.8% in Q2 2014, the second consecutive quarter on quarter increase of 0.8%. GDP was 3.1% higher in Q2 2014 compared with the same quarter a year ago. The economy has passed its pre-crisis 2008 peak.

The Office for National Statistics [pdf] said output increased in two of the four main industrial groupings within the economy in Q2 2014 compared with Q1 2014. In order of their contribution, output increased by 1.0% in services and by 0.4% in production. However, output decreased by 0.5% in construction and by 0.2% in agriculture.

In Q2 2014 GDP was estimated to be 0.2% above the peak in Q1 2008. From peak to trough in 2009, the economy shrank by 7.2%.

Gary Cooke, senior dealer at the forex specialists FEXCO, commented: ""Bang on prediction growth, and an economy that has surpassed its pre-crash peak - the headlines will reassure and rally Sterling in equal measure.

"After some insipid retail sales figures and the Bank of England's MPC minutes revealed Britain's rate setters to be less hawkish than thought, the Pound slipped to a four-week low against the Dollar on Thursday. But Friday's strong if unsurprising GDP numbers will ensure the pound ends the week with a bang not a whimper.

"With Britain's strong growth leaving most of the Eurozone in the dust, sterling will continue to outpace the euro - -  which this week touched a 23-month low against the pound.

"But a closer look at the numbers reveal the UK economy is returning to type. As the manufacturing and construction sectors shrink, services now account for almost 80% of the British economy.

"With the hoped-for interest rate rise still some time off and inflation outstripping wage rises, awkward questions remain about the quality of the recovery.

"So sterling's rally against Dollar is likely to be more modest, and there is no guarantee it'll breach the $1.70 mark seen earlier this week."

George Osborne, chancellor, said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

Chris Williamson, Markit's chief economist, said: "Any celebrations will of course also be marred by the fact that the milestone reminds us that it has taken some six years for the country to merely regain the economic might it had before the financial crisis struck."