American growth streets ahead of struggling UK

The world's biggest economy put the UK in the shade during the final quarter of 2010, as a consumer spending surge and stronger exports quickened the pace of US growth, official figures revealed today.

The US grew at an annualised pace of 3.2% between October and December, in complete contrast to the shock 0.5% slide for the UK which cast doubts over the nation's fragile pull out of recession.

The 3.2% advance fell slightly short of market hopes, but was faster than the 2.6% annual pace seen in the third quarter after exports picked up and the biggest rise in consumer spending for more than four years.

The Federal Reserve launched efforts to pump an extra $600 billion (£377 billion) into the economy during the quarter to ward off deflation and maintain growth.

Annual growth in the US last year was 2.9%, the economy's best performance since 2005.

ING Bank economist Teunis Brosens said: "As GDP growth was mostly driven by consumption, the question is whether consumers can keep this up in coming quarters."

But experts warned that the US economy is still not growing fast enough to tackle unemployment, which stands at 9.4%.