Britain stormed out of its longest double-dip recession since the 1950s after its economy returned to growth in the third quarter with a robust gain of 1.0 percent, official data showed on Thursday.
British gross domestic product, or combined value of produced goods and services, grew at the strongest rate for five years during the July-September period after contracting in the previous three quarters.
Market expectations had been for the economy of Britain, which is not part of the eurozone, to have expanded by 0.6 percent in the third quarter compared with the second after falling into a double-dip recession in late 2011.
British Prime Minister David Cameron welcomed the data but warned against complacency amid global economic headwinds.
"There is still much to do, but these GDP figures show we are on the right track, and our economy is healing," Cameron said in a statement.
Finance minister George Osborne echoed the cautious sentiment, saying that "yesterday's weak data from the eurozone were a reminder that we still face many economic challenges at home and abroad."
Britain escaped from a deep downturn in late 2009 but fell back into recession at the end of 2011.
The economy contracted by 0.4 percent in the second quarter of this year after shrinking by 0.3 percent in the first -- and by 0.4 percent in the final quarter of 2011.
"GDP was estimated to have increased by 1.0 percent in Q3 2012 compared with Q2 2012," the Office for National Statistics said in a statement.
"The largest contribution to the increase came from the services sector. There was also an increase in activity in the production sector. Activity in the construction sector fell."
Growth was also affected by one-off factors, including the London 2012 Olympic Games and rebounding activity after an extra public holiday for Queen Elizabeth II's Diamond Jubilee, the ONS said.
"Not only did the UK pull out of its double-dip in Q3, but the one percent quarterly rise in GDP was a fair bit better than expected," said Vicky Redwood, senior economist at the Capital Economics research group.
"Admittedly, much of this reflected temporary factors. We think that the reversal of the Jubilee effect probably added about 0.5 percent, the Olympic ticket sales added 0.2 percent and there may have been a wider Olympic boost.
"But even accounting for this suggests that underlying output managed to rise by a small amount -- an improvement on recent quarters. It won't be plain sailing from now on, though. There are still a number of constraints on the recovery."
Output was meanwhile flat in the third quarter compared with the equivalent period in 2011, the ONS added.
Despite emerging from recession, Britain was facing considerable difficulties, not least from tight credit conditions and worries about the impact of the debt crisis in the eurozone, a key trading partner.
Other major headwinds include rising inflation on higher energy and food prices, an uncertain jobs market and ongoing austerity measures from Britain's coalition government.