Economy expected to show strongest growth since 2007

Claims that Britain's economy is now powering ahead are "cloud cuckoo land" according to shadow chancellor Ed Balls.

With official figures today expected to show the pace of economic growth continuing to pick up, Mr Balls said that it had still to return to the level it was before the global financial crisis broke in 2008.

He told BBC2's Newsnight:

The Bank of England has forecast 0.9% growth for the fourth quarter but economic data published since then have prompted some experts to expect a slightly lower rate.

A bumper Christmas that saw retail sales shatter expectations by climbing 2.6% in December will not have helped boost overall figures too much after a slow performance from the sector in October and November.

Meanwhile latest official figures from the construction industry showed it was likely to drag on GDP, after succumbing to a 4% slump in November, despite being buoyed by Government policies such as Help to Buy.

Britain's economic recovery could prove to be a "short term bounce" if it is based on a housing boom, Vince Cable has warned.

The Business Secretary insisted sustained growth depends on rebalancing the economy and preventing a return to "boom and bust".

The comments, during a keynote speech at the Bank of England, are the latest expression of concern from the senior Liberal Democrat over the state of the property market.

He also launched a scathing attack on the Tories, branding their plans for deeper spending cuts after the election "slashing for its own sake", and complaining that the prospect of a referendum on EU membership is undermining business confidence.

In the address to the Royal Economic Society, Mr Cable argued that a "real recovery is taking place".

Official figures are expected to show the best annual pace of growth since 2007.

Economists expect that data from the Office for National Statistics to show a fourth consecutive quarter of gross domestic product (GDP) expansion though this may have slowed to 0.7% after notching up 0.8% in the previous period.

Even so, it should mean overall growth of 1.9% for 2013 following a limp increase of just 0.3% for the whole of the previous year. The economy grew by 3.4% in 2007.

It demonstrates the scale of the improvements in the UK's economic prospects - one year after it was feared that the country was about to sink into an unprecedented "triple dip" recession.

The figures should provide the latest boost for Chancellor George Osborne after the International Monetary Fund again upgraded its forecast for growth in Britain.