The UK is now officially out of recession after the ONS announced that the economy enjoyed a 1% boost in performance compared to the previous quarter, where it shrank by 0.4%.

It means an end to three consecutive quarters of contraction and represents the fastest growth figures recorded for five years.

The ONS - in its first stab at a credible estimate for the third quarter - said the economy the swelled by 0.3% so far this year and was now flat compared to the same period a year ago.

Prime minister David Cameron, said: 'We still have a long way to go and there are still difficulties ahead, but I think these figures do show that we are on the right track, we have got the right approach.'

However, despite the triumphalist noises being trumpeted by the government, economists warned that the figure was boosted by the instant uplift from the lost working day incurred from Queen's Diamond Jubilee in June.

The ONS believes the extra bank holiday shaved half a percentage point off growth in the second quarter, and the subsequent bounce back in the third.

And it cited Olympic ticket sales as providing an extra 0.2% boost to GDP.

The ONS report showed that the economy has grown 0.6% since the third quarter of 2010, just after the coalition came to power.

Output from the UK's vital services output was up by 1.3% - its strongest quarterly growth since the third quarter of 2007.

Chancellor George Osborne echoed the PM's sentiment, saying: 'There is still a long way to go, but these figures show we are on the right track,' he said. 'This is another sign that the economy is healing.'

Industrial output was up 1.1%, while the UK's construction sector was struggling to recover and contracted 2.5%.

However, the ONS report showed that the economy was still down by 6.4% between mid-2008 and the middle of 2009, but had since recovered by around half of that amount.

Glenn Uniacke, senior dealer at forex specialists Moneycorp, said: 'The markets had expected strong growth. What they got was the impression that a blue touch paper had been lit.

'For the economy to have lurched skyward after such a prolonged slump appears an impressive turnaround.

'Much of the boost is due to one-off factors like the Olympics, and the natural rebound effect that follows a quarter in which working days are lost. Strip out the exceptional factors and the figure is less breathtaking - closer to zero. And after a pitiful start to the year, the annual trend is likely to be largely flat.'Get the latest news in your inbox. Sign up to receive the Accountancy Live e-newsletter, HERE