Britain got a double boost yesterday as its recovery from recession gathered more momentum and the International Monetary Fund raised the country’s growth forecasts by more than for any other major economy.

Factories expanded production far more quickly than expected in February, UK statistics office data showed. Separate surveys showed a strong first quarter for companies and a long-awaited pick-up in wages.

The IMF warned of risks from its surging high prices

The signs that Britain is finally starting to put the financial crisis behind it are well-timed for Chancellor George Osborne. He visits the IMF this week, a year after Fund officials urged him in vain to tone down his austerity programme to get growth going again.

For the second time in six months, the Fund sharply raised its forecasts for British growth, which it now sees hitting 2.9 per cent in 2014 before easing to 2.5 per cent next year. That was up from previous forecasts of 2.4 and 2.2 per cent.

But for all of its pace since early 2013, Britain’s economy is only expected to get back to its pre-crisis size in the second quarter of this year, significantly lagging other economies such as the US and Germany.

With the recovery still in its early days, Bank of England policymakers, who meet this week, are in no rush to raise interest rates from their record low of 0.5 per cent, especially with inflation subdued. The bank has signalled the second quarter of next year as the most likely time for a rate hike.

In its assessment of the British economy yesterday, the IMF warned of risks from the country’s ‘surging house prices’ and said its big banking sector could take a hit if growth in emerging economies slowed sharply.

The pound jumped yesterday when statistics showed manufacturing output expanded by one per cent in February from January – its biggest increase since September. The annual growth rate of 3.8 per cent was the highest in three years.