Britain's official statisticians have been underestimating the strength of the economy since 2001, according to official figures released today.

Upward revisions to GDP data spanning half a decade made by the office for National Statistics will lend weight to hawks who believe interest rates must rise to combat inflation.

The figures also showed the economy posted stronger growth than previously thought in the first three months of the year.

Howard Archer, the Global Insight economist, said: "The upward revisions to GDP growth since 2001 will increase the Bank of England’s concern about the amount of spare capacity in the UK economy, which was highlighted as one of the main upside risks to inflation in the June MPC (Monetary Policy Committee) minutes."

The ONS said that first-quarter GDP growth was upwardly revised to a quarterly 0.7 per cent and a year-on-year increase of 2.3 per cent, from 0.6 per cent and 2.2 per cent respectively. Analysts had not expected a change.

John Butler, economist at HSBC: "The pick up in economic activity over the past 6 months has been a little faster than previously anticipated, which at the margin will be interpreted as hawkish news for interest rates."

In a series of so-called "Blue Book" revisions, the ONS also rewrote the official economic history, saying that GDP growth for the whole year of 2005 came in at 1.9 per cent, from 1.8 per cent previously, The change was chiefly due to updated estimates of business services.

For 2004, GDP was revised up to 3.3 per cent from 3.1 per cent, for 2003 to 2.7 per cent from 2.5 per cent, for 2002 to 2.1 per cent from 2.0 per cent and for 2001 to 2.4 per cent from 2.2 per cent.

Jonathan Loynes at Capital Economics said: "The MPC has insisted for some time that the official data might be understating the true strength of activity, these changes may simply confirm what it already suspected."

Treasury minister Ed Balls is expected to say in a speech today that the stronger figures demonstrate the British economy's improved balance as business investment strengthens.

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