^{Friday 23rd July 2010}

The UK economy grew twice as fast as economists predicted in the second quarter of 2010 and at the fastest pace in four years as services, manufacturing and construction all rebound.

GDP rose 1.1% in the three months through to June after increasing 0.3% in the previous quarter, the Office for National Statistics said today. The Bank of England now faces a tough decision on whether to ease inflation or reduce stimulus measure propping up the British economy.

Services, which make up 76% of UK GDP, grew 0.9% on the quarter, the most since 2007. Manufacturing jumped 1.6%, the largest increase since 1999, and the 6.6% surge in construction was the biggest since 1963. The building industry contracted in the first quarter because of particularly cold weather.

The pound jumped as much as 0.3% after the release and traded at $1.5386 in London. The yield on the benchmark two-year government bond was up 7 basis points today at 0.846%.

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