While second quarter GDP figures for Japan have not yet been published, the economy shrank by 0.5pc in the first quarter, suggesting it would be close to the bottom of the growth league for the first six months of 2024.
Statisticians said last week that the economy grew faster than previously thought in the wake of lockdown, expanding by 4.8pc rather than 4.3pc in 2022. The new figures mean the economy is now 2.3pc larger than its pre-pandemic size.
Liz McKeown, director of economic statistics at the ONS, said growth was led by Britain’s dominant services sector, with activity at law firms, IT businesses and scientific research driving the expansion.
She said the economy had now “grown strongly for two quarters, following the weakness we saw in the second half of last year”.
By contrast, Germany continues to teeter on the brink of recession, with declining investment and persistent weakness in manufacturing following Russia’s invasion of Ukraine damaging consumer sentiment.
A survey of the financial sector this week showed optimism in Europe’s biggest economy plunged in August, highlighting wider concerns for the eurozone. The ZEW economic sentiment index fell dramatically from 41.8 points in July to just 19.2 points in August.
Klaus Wohlrabe, head of surveys at Ifo economic institute, said: “The German economy is stuck in crisis.
“Hardly any improvement is to be expected in the third quarter of 2024 either.”
France is also facing questions over the health of its economy, with the country’s debt pile expected to keep rising.
Earlier this summer, UBS said the UK could become “an island of stability” in financial markets, as the UK’s reputation as Europe’s “problem child” is reversed.
Sir Keir will host an international investment summit on Oct 14 where the Government will be hoping to attract more foreign cash.
Despite the good news, Rachel Reeves hinted tax rises were on the way in her maiden Budget on Oct 30.
The Chancellor said: “The new Government is under no illusion as to the scale of the challenge we have inherited after more than a decade of low economic growth and a £22bn black hole in the public finances.
“That is why we have made economic growth our national mission and we are taking the tough decisions now to fix the foundations, so we can rebuild Britain and make every part of the country better off.”
Ms Reeves has already warned of “tough decisions” in her maiden Budget on Oct 30, including on welfare.
“If you can work, you should work,” she said after official figures showed worklessness in Britain rose to its highest level in more than a decade.
Jake Finney, an economist at PwC, said: “The latest growth statistics provide more evidence that the economy is gradually turning a corner as the new Government takes office.”
However, Britain’s growth has also been flattered by surging immigration. The figures showed the economy grew at half the pace when adjusted for population size, with GDP per head rising 0.3pc over the quarter. This is slower than growth per head in the US but this builds on a strong 0.5pc expansion in the first three months of the year.