US on the up as economy grows 2.3pc

AMERICA’S powerhouse economy has bounced back from its winter f r eeze amid si gns of improving health across the Western world.

Official figures published in Washington showed gross domestic product – total US output – rose at an annual pace of 2.3pc in the second quarter of the year.

That is the equivalent of just under 0.6pc on a quarterly basis – leaving it slightly behind the UK where output rose 0.7pc between April and June.

The figures also showed the US economy grew at an annual rate of 0.6pc in the first quarter year, or 0.15pc on a quarterly basis. That was better than the 0.2pc annualised slump initially reported.

The Commerce Department said growth was boosted by increased consumer spending and cheaper fuel prices.

Analysts said the rebound could persuade the Federal Reserve to raise interest rates as early as September, having held them at rock bottom levels since the recession.

‘Updated GDP numbers deliver a double-punch to US economy doom-mongers, painting a reassuringly bright picture of the health of the US economy so far this year and raising the odds of the Fed hiking interest rates in September,’ said Chris Williamson, the chief economist at research firm Markit.

The recovery in the US, the world’s biggest economy, came as the CBI said the UK is ‘on a firm footing going into the third quarter’ as the business and professional services sector thrives.

A survey by the european Commission found confidence in the eurozone has hit a four-year high despite the crisis in Greece.

Separate figures showed output in Ireland jumped 1.4pc quarteron- quarter i n the f i rst three months of the year. The Irish economy grew by 5.2pc last year while Spain clocked up growth of 1pc in the second quarter, its best performance since 2007.