BRITAIN has avoided a triple-dip recession after the economy grew by a better-than-expected 0.3% during the first quarter of 2013, official figures revealed today.

The first estimate from the Office for National Statistics (ONS) means the UK has been pulled back from the brink of its third recession since the financial crisis struck in 2008, reversing a 0.3% contraction in the final three months of 2012.

The figures showed the impact of the snow at the start of the year was not as bad as feared, with weather-hit trading on the high street offset by a boost in energy demand as households ramped up their heating during the cold snap.

The ONS said the powerhouse services sector grew by 0.6% between January and March, driven by 1.1% growth in the wholesale and retail distribution, hotels and restaurant trades sector.

There was also a strong boost from the transport, storage and communications sector, which saw growth of 1.4%.

Surging demand for electricity and gas during the cold weather saw output from the energy supply sector rise 0.5%.

While sales in the retail sector fell in January and March, a strong February helped it notch up growth of 0.3% overall in the quarter.

The figures will relieve some of the pressure on Chancellor George Osborne to rethink his austerity policy, following recent warnings that the UK is a “crisis economy” and last week’s ratings downgrade.

But fears remain over the strength of the recovery, with key sectors such as construction and manufacturing still well below the peak in 2008.

Construction activity plunged by 2.5% in the first quarter and still remains 18.1% below pre-financial crisis levels.

Production and manufacturing edged 0.2% higher at the start of the year, but are also significantly down on 2008, by 13.4%.

The economy as a whole is 2.6% below the 2008 peak, despite improvements from the services sector, which is 0.8% higher than five years ago.

The figures are better than most economists had been expecting, with growth of just 0.1% pencilled in. However, it is only the first estimate and is subject to change in future revisions, with updated figures due on May 23.

George Osborne said: “Today’s figures are an encouraging sign the economy is healing. Despite a tough economic backdrop, we are making progress.”

He added: “We all know there are no easy answers to problems built up over many years, and I can’t promise the road ahead will always be smooth, but by continuing to confront our problems head on Britain is recovering and we are building an economy fit for the future.”

Business Secretary Vince Cable said: “We’ve always said the road to recovery would be a marathon, not a sprint.

“Today’s figures are modestly encouraging and taken alongside other indicators such as employment figures, suggest that things are going in the right direction.

“However there is still a long way to go and some serious issues such as the systemic lack of bank lending to SMEs (small and medium-sized enterprises), the weakness in the construction sector and the need to press further on trade and exports, which I am doing now on my visit to Brazil.

“These issues all need to be addressed before people feel like the economy is genuinely starting to recover.”

Vicky Redwood, of consultancy Capital Economics, said: “The recovery still faces significant obstacles ahead, with households still experiencing falling real pay and policymakers still struggling to get bank lending to rise.

“Nonetheless, today’s figure offers some hope that things might finally be starting to move in the right direction again.”

Rob Carnell at ING Bank cautioned that the first estimate is based on “scant real data”, taking into account only 44% of total GDP output.

But he said it was “one in the eye” for the International Monetary Fund (IMF), which criticised the Government’s deficit-busting approach, and ratings agencies that have stripped the UK of its AAA status.