The UK economy grew by a slower-than-expected 0.8% in the first quarter of this year but is still on the cusp of surpassing its pre-crisis peak, official figures showed today.

Gross domestic product (GDP) had been expected to grow by 0.9% but was dragged down by contractions in mining and other production activity, according to the Office for National Statistics (ONS).

However manufacturing grew by 1.3%, its strongest quarter for nearly four years, bolstering hopes for a re-balancing in the recovery away from its reliance on consumer spending.

The UK has been struggling to return to its previous levels of activity since it plunged into recession six years ago.

But the overall size of the economy in the first quarter was just 0.6% below the level where it last peaked in early 2008, meaning it looks likely to return to this level during the current quarter.

During the start of 2014, the construction sector is estimated to have grown by just 0.3%, hampered by storms and high rainfall in January and February, although the ONS said the weather was not judged to have had a significant impact on GDP growth over the period.

Mining and quarrying, together with electricity and gas production, and agriculture, shrank over the quarter. The dominant services sector, representing more than three-quarters of output, grew by 0.9%. Manufacturing and construction are taking longer to return to health, and remain 7.7% and 12.2% below their pre-crisis peaks.

Suffolk Chamber of Commerce welcomed the further evidence of growth, but warned that the Government still needed to do more to underpin the recovery.

“Today’s figures are more reason for encouragement as we are now seeing business growth which is consistent and consecutive,” chief executive John Dugmore.

“GDP is a trusted measure of the economic activity and the national rise of 0.8% in the first quarter shows that the hard work and entrepreneurial spirit in Suffolk continues to make a difference.

However, he added: “It is important that government does more to support business if this fragile growth is to continue.

“We need to see more done on addressing challenges businesses are facing such as infrastructure investment and improving skills.”

Chancellor George Osborne said: “Today’s figures show that Britain is coming back - but we can’t take that for granted. We have to carry on working through our long-term economic plan.

“For the first time in a decade all three main sectors of the economy - manufacturing, services and construction - have grown by at least 3% over the last year.

“The impact of the great recession is still being felt, but the foundations for a broad-based recovery are now in place. The biggest risk to economic security would be abandoning the plan that is laying those foundations.”

However, shadow chancellor Ed Balls said: “Now that growth has finally returned, the question is whether ordinary working people will properly feel the benefit and we have a balanced recovery that’s built to last.

“David Cameron and George Osborne want to tell people the cost-of-living crisis is over, but millions of hardworking people are still feeling no recovery at all.”

GDP was 3.1% higher in the first quarter than in the same period last year, the best year-on-year growth since the fourth quarter of 2007.

Deloitte chief economist Ian Stewart said: “The UK economy is in the sweet spot of the economic cycle, with growth powering ahead of our major competitors and inflation falling away.

“Business investment and consumer incomes, two conspicuous gaps in Britain’s recovery, are making a comeback. This is the Goldilocks moment for the UK economy, with growth neither too hot nor too cold.”

Jeremy Cook, chief economist at currency brokers World First, said: “While this figure has missed estimates, slightly, the overall feeling is still one of strength in the UK. In fact, this is the kind of news the economy needs - solid but not spectacular.”

He said increases in manufacturing and industrial production were “encouraging for those of us who remain concerned as to the UK economy’s over-reliance on the service sector”.

Jonathan Loynes, of Capital Economics, said there remained concerns over the sustainability of the recovery.

But he added: “For now at least the figures point to a ‘Goldilocks’ scenario of solid, but not excessive, growth which should allow both inflation and interest rates to remain at low levels for some time yet.”

The update comes a year after fears that Britain was about to plunge into an unprecedented “triple-dip” recession amid dire warnings from the International Monetary Fund (IMF) about austerity policies.

But instead the UK has now registered its fifth consecutive quarter of GDP expansion, accelerating from 0.7% in the final quarter of 2013.

The IMF now expects the UK to be the world’s fastest-growing major advanced economy in 2014 with a revised growth forecast of 2.9%. The independent Office for Budget Responsibility predicts 2.7% and the Bank of England 3.4%.