The British gross domestic product (GDP) figure for the fourth quarter of 2013 stood at 0.7%, with growth for the full year reaching 1.9%.Output for 2013 reached its fastest annual rate of growth for six years, according to the Office for National Statistics (ONS).
The figures were in keeping with forecasts made by economists.
The preliminary result shows the important service sector – which accounts for around three-quarters of the economy – was up 0.8%.
The ONS said construction was 0.3% down on the previous three months, due to weak figures being recorded in November.
Agriculture was up 0.5% in the October to December period, while production was up 0.7% in the same three months.
Manufacturing was up 0.9% in the quarter, which was its biggest quarter-on-quarter rise since Q3 in 2010.
ONS chief economist Joe Grice said the service sector is now above the pre-recession levels, but both production and construction are still below that level overall.
Mr Grice said: “We have now seen four successive quarters of significant growth and the economy does seem to be improving more consistently.
“Today’s estimate suggests over four-fifths of the fall in GDP during the recession has been recovered, although it still remains 1.3% below the pre-recession peak.”
The latest figures have given a boost to the Chancellor and come just weeks after the International Monetary Fund (IMF) did a U-turn on its forecast for the UK economy.
George Osborne told Sky News: “I think these numbers represent a real boost to the economic security of hard-working families.
“And the good news is the recovery is broadly balanced with manufacturing growing the fastest of any sector, so there’s evidence that our long-term economic plan is working, but I am the first to say the job isn’t done and the biggest risk to the recovery would be to come off that economic plan, and that would damage job creation and mean we don’t have such bright economic prospects.”
He added: “Where I have had the opportunity I have focused the effort on those on low and middle incomes.
“That’s my priority, that’s where my tax-cutting priorities lie becaue I want to help those hard-working families who have got more economic security because jobs are being created, but of course have had a very dififcult time because our country went through such a terrible economic period.”
The IMF now forecasts growth in 2014 of 2.4%, a figure which is in line with the Office for Budget Responsibility.
The Bank of England’s current forecast is for growth of 2.8% in 2014.
Shadow chancellor Ed Balls told Sky News: “This is not yet the strong and balanced recovery we need.
“It’s not a recovery driven by business investment – that’s still very flat – or by exports – they’ve been weak – what’s going on at the moment is consumers are saving less and consumer spending is picking up somewhat.
“That’s happening because housing demand and house prices are going up.
“We’re not building the houses we need to match that that’s why construction output is still falling. There’s a lot more to do.”
Mr Balls added: “For working people facing a cost-of-living crisis this is still no recovery at all.”
Robert Johnson, managing director of Craftsman Tools, an engineering firm in Otley, West Yorkshire told Sky News: “I think the growth is real.
“We have seen a 10% growth last year and we are predicting growth of 30% over the next three years.”
But one of the biggest problems his firm faced was getting skilled workers.
Mr Johnson said: “We feel we have got to invest in advanced machinery and equipment which we can do, but getting skilled people is the hardest thing.
“We have had to start our own apprentice school two years ago, and we are training our own apprentices to fill the skills gap.”
And a skills shortage risked holding the economy back, he warned.
“It’s a mixture of skilled people and advanced machinery that will help us go forward,” said Mr Johnson.