Expectations that the economy is recovering were reinforced today by data showing the first rise in industrial production for 14 months.

Industrial output in April rose 0.3 per cent from March, according to the Office for National Statistics (ONS), the first rise since February 2008. Analysts had forecast a fall of 0.1 per cent.

In a further boost to confidence, manufacturing output between March and April rose 0.2 per cent. It was the second month output rose after March's previously reported drop of 0.1 per cent was revised up.

Colin Ellis, European economist at Daiwa Securities, said: "Today's data are particularly encouraging in that they suggest that UK firms, in contrast with the German counterparts, may have worked through their inventory overhang somewhat more quickly."

At the same time, consumer demand could be steadying as trade figures showed that imports into the UK rose by 2 per cent in April. But while overall exports grew by 2.4 per cent, exports of traded goods excluding oil edged down by 0.2 per cent, indicating that the benefit to UK factories from the weaker pound is being offset by depressed demand from overseas.

The data is the latest in a spate of more upbeat indicators about the economy.

Last week, a key survey suggested that during May service industries, the engine room of the economy, grew for the first time in more than a year. The CIPS/Markit barometer of services conditions climbed to 51.7 from 48.7 in April in a sixth consecutive rise, taking it back above the key 50 mark that signals renewed expansion.

Howard Archer, chief UK and European economist at IHS Global Insight, said the ONS figures added to the "recent stream of improved data ... and reinforce belief the economy will see only modest GDP contraction at worst in the second quarter".

The figures also give credence to the forecasts of Alistair Darling, the Chancellor, who said in his Budget that the economy will begin to recover by Christmas this year. At the time many economists disagreed with his projections, including experts at the International Monetary Fund.

The IMF has forecast that Britain would be stuck in the recession for another year, depressed by the housing slump and the slowdown in spending.

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