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Governor of the Bank of England, Mervyn King.IAN HODGSON/The Associated Press

Britain's economy grew 1 per cent in the third quarter as originally estimated, data showed on Tuesday, although that strength is unlikely to be sustained.

The figures, confirming that Britain has exited recession, will buoy finance minister George Osborne a week before he is due to deliver his half-yearly budget statement.

Gross domestic product expanded by 1 per cent on the quarter, in line with the Office for National Statistics' initial estimate and economists' forecasts.

Compared to a year ago, output was 0.1 pct lower, slightly worse than first thought, the ONS said.

Consumer spending rose 0.6 per cent on the quarter – the biggest increase in more than two years. The ONS said that was driven by spending on recreation and culture, including tickets for the London Olympics which took place during the three-month period.

The third-quarter GDP reading was also flattered by a rebound from the previous three months when an extra public holiday dented output.

Total exports rose 1.7 per cent on the quarter, while gross final expenditure less total imports dipped 0.4 per cent.

Business surveys have painted a gloomier picture of the fourth quarter, and retail sales – a gauge of vital consumer spending – posted a surprise drop in October.

Meanwhile, outgoing Bank of England Governor Mervyn King has warned that output may shrink again between October and December.

Output in Britain's service sector – which makes up more than three quarters of GDP – rose by 1.3 per cent in the third quarter, the largest increase in five years. It fell 0.1 per cent in the second quarter.

Industrial output was 0.9 per cent higher, while construction – which accounts for less than 7 per cent of GDP – contracted by 2.6 per cent.

Britain has not fully recovered the output lost in the wake of the financial crisis, while the euro zone's debt problems, government austerity to reduce the budget deficit and banks' reluctance to lend are holding back economic growth.

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