The recovery in the United States gathered pace at the start of the year as American families splashed out.
Official figures out yesterday showed output in the world’s biggest economy rose at an annual rate of 2.5 per cent in the first quarter of the year.
It was weaker than the 3pc expected but a vast improvement on growth of just 0.4pc in the final three months of last year.
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The surge came as the biggest increase in consumer spending in more than two years offset deep cuts to government budgets – particularly in defence.
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Annual growth of 2.5 per cent – or around 0.6 per cent on a quarterly basis – put the US well ahead of Europe where a string of countries remain mired in recession.
The UK economy grew by 0.3 per cent in the first quarter of the year, avoiding a potentially devastating triple-dip recession.
Germany is also expected to eke out modest growth between January and March but the slump looks set to continue across much of the eurozone.
Research group Markit is forecasting growth of 0.3 per cent in Germany but a decline of 0.4per cent in France, 0.5 per cent in Spain and 0.7 per cent in Italy.
Christine Lagarde, managing director of the International Monetary Fund, has warned that a ‘three-speed’ global economy is emerging – with developing countries doing well, the US on the mend, and Europe stuck in the slow lane.
And Mark Carney, the incoming governor of the Bank of England, recently said: ‘The US is breaking out of the pack of crisis economies that include the eurozone, the UK and Japan.’
Analysts reckon the return to growth in Britain could be enough to deter the Bank of England from unleashing another round of quantitative easing this spring. But pressure is mounting on the European Central Bank to ramp up efforts to stimulate growth in the eurozone. It is thought an interest rate cut could come as soon as next week.
The US Federal Reserve also looks likely to continue to support the recovery in America amid fears the economy will struggle to deal with further cuts to government spending.
‘It wasn’t the bang-up start to the year we had hoped for and we will only decelerate from here,’ said Avery Shenfeld, chief economist at CIBC World Market Economics in Toronto.
Rob Carnell, at ING in London, said that while the first quarter ‘was not bad for growth’, the economy is losing momentum and is likely to expand by closer to 1pc in the second quarter.
‘A rogue negative quarter can never be ruled out,’ he said. ‘This is going to be a choppy year for both growth and markets.’