UK economy expands again, passes pre-crisis peak

The U.K. economy continued its robust expansion in the second quarter and is now larger than at its pre-crisis peak at the start of 2008, overcoming some nascent signs of a faltering economy.

The Office of National Statistics (ONS) said on Friday that second-quarter gross domestic product (GDP) came in at 0.8 percent on the quarter, which met economists' expectations. It followed growth of 0.8 percent in the first three months of the year.

The data mean the country's economy is now 0.2 percent larger than it was in the first quarter of 2008, the ONS said, adding that from peak to trough in 2009 the economy shrunk by 7.2 percent. It leaves output up 3.1 percent on a year ago.

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The GDP figures followed some disappointing data from both industrial production and construction, which had given rise to concerns about the strength of the U.K.'s economy.

Earlier this month, the ONS revealed that manufacturing output fell 1.3 percent in May, while industrial production - a broader measure - slipped 0.7 percent.

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"What we do know from this initial reading (of second-quarter GDP) is they've obviously made an assumption about industrial production bouncing back quite sharply," Marc Ostwald of Monument Securities told CNBC.

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"I'm sure that people - after a run of data from the U.K. which has been slightly on the weak side relative to peoples' expectations - will be relieved that this has come in as expected."

The Chancellor of the Exchequer, George Osborne, is likely to be especially pleased with the GDP data. He described it as a "milestone", but warned there was still "a long way to go."

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"The Great Recession was one of the deepest of any major economy and cost Britain six years," he said in a statement. "Now we owe it to hardworking taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all."

Rate hike in focus

The GDP figures come amid widespread speculation as to when the Bank of England (BoE) will raise interest rates from their historically low levels, following mixed messages from central bank head Mark Carney. Earlier this week, the BoE governor warned that an interest rate hike had the potential to damage the U.K.'s recovery and cause households to cut spending.

A rise in rates had not been expected until 2015, although strong data releases are leading analysts to consider the possibility of a hike before this year is out.

"Ongoing robust GDP growth in the second quarter very much keeps open the possibility that the Bank of England could raise interest rates before the end of 2014, although it remains a very close call and much will clearly depend on how well growth holds up over the coming months and what happens with earnings growth," Howard Archer, chief U.K. economist at IHS Global Insight said in a note.

—By CNBC's Katrina Bishop