* Swiss GDP growth accelerates to 1.2 pct yoy in Q3
* KOF leading indicator rises to 110.3 points in Nov
* Economists say Swiss economic recovery under way (Wraps economic data, adds reaction)
ZURICH, Nov 30 (Reuters) - Switzerland's economy grew 1.2 percent year-on-year in the third quarter, accelerating sharply from a weak second quarter as manufacturing and exports picked up.
The upswing looked set to continue as the KOF leading indicator, which points to expected performance in about six months, rose in November to 110.3 points, its highest since mid-2010 and beating even the most optimistic estimate in a Reuters poll of analysts.
Falling retail sales in October provided the only downbeat note in a raft of data before the Swiss National Bank's quarterly policy assessment on Dec 14.
"The upturn is here," economic think tank BAK said, noting the annualized economic growth rate had hit nearly 2.5 percent in the third quarter and the expansion was broadly based.
Growth rose to 0.6 percent quarter on quarter from an upwardly revised 0.4 percent in the second three months, the State Secretariat for Economic Affairs said on Thursday.
The export-led economy had expanded 0.5 percent year on year in the second quarter, revised higher from the 0.3 percent originally reported, its slowest annual rate in nearly eight years.
The third-quarter growth easily beat the average estimate of 0.9 percent in a Reuters poll of economists, according to Thomson Reuters data.
"Investments are playing an increasingly important role. That is good news because it can lead to a recovery that will accelerate without external input," VP Bank said in a note.
"Today's growth rates are a pre-Christmas present for the SNB. The franc does no longer weigh on the Swiss economy," the bank's economists said.
The economy has been gradually recovering since the Swiss National Bank (SNB) abandoned its 1.20 floor for the franc versus the euro nearly three years ago, sending the safe-haven franc soaring against the currency of its main export market.
SNB board member Fritz Zurbruegg said on Wednesday that the franc remained susceptible to safe-haven pressure, adding the central bank was still ready to intervene to stem upward pressure on the currency.
The SNB has been using negative interest rates and currency intervention to rein in the franc, which was trading at around 1.1661 to the euro, down from under 1.07 in February.
The market is pricing in negative Swiss rates well into 2019 1/80#FES: 3/8
The Swiss government in September cut its 2017 growth estimate to 0.9 percent. It forecast 2 percent expansion in 2018.
(Reporting by Michael Shields, Editing and Graphic by Jeremy Gaunt)