Revised data shows the UK economy grew faster than expected in the second quarter, indicating that the economy remained solid before the recent surge in energy prices and borrowing costs.

The Office for National Statistics said on Wednesday that the UK economy grew 0.5% quarter-on-quarter in the three months to June, above the initial estimate of 0.4% previously published. In the first quarter, the UK economy grew 0.6%.

The report confirms that the UK economy performed far better than expected in the first half of this year. Although the Middle East war has reignited inflationary pressures, there are signs that consumers continued to spend during the summer.

After the data was released, the pound extended its gains, rising 0.2% to $1.3259.

Liz McKeown, Director of Economic Statistics at the Office for National Statistics, said: "The strengthening of services growth in the latest quarter means the economy is now slightly larger than previously estimated."

However, the outlook has darkened in recent weeks, and businesses and households are expected to face increasing pressure in the second half of the year. Economists forecast that economic growth will slow to 0.2% in the third and fourth quarters, as a new round of cost-of-living increases is passed on to consumers and uncertainty intensifies ahead of next month's budget announcement.