However, stripping out the effects of one-off factors such as the Olympics, growth was closer to 0.3% - still positive, but hardly strong.

Immediate prospects for the UK economy are mixed. The consumer sector is showing signs of growth. But the economy faces strong headwinds - from the euro crisis, the squeeze on public spending and a fragile financial sector.

Earlier this month, Lord Adair Turner, chairman of the UK's Financial Services Authority and a leading candidate to be the next governor of the Bank of England, raised doubts over growth the pace of the UK recovery. He warned that the process of debt reduction for businesses, households, banks and the government could depress growth for many more years.

The question that policymakers continue to grapple with is what, if anything, can be done to boost growth?

Lord Turner's believes that the stimulative effects of quantitative easing (QE), may already be waning. He advocates more radical monetary policy and hinted that the government should consider cancelling government debt acquired by the Bank through QE.

This is a very radical step, one which blurs the line between monetary and fiscal policy. The eminent monetarist economist, Milton Friedman, likened such a policy to dropping freshly-minted money from a helicopter.

In a speech last week Sir Mervyn King, the outgoing governor of the Bank of England, acknowledged that the beneficial effects of QE have probably diminished.

However, Sir Mervyn rejected the notion that the Bank of England should write off government debt. He warned that such policy would prevent the Bank from reversing the current expansionary policy when the need arose – and by doing so it would damage the Bank's credibility and risk higher inflation down the line.

There is an even more fundamental difference of opinion at work here. For Sir Mervyn advanced economies may have to accept more subdued economic growth as the price to be paid for a necessary adjustment in asset prices and private sector debt. Lord Turner, by contrast, believes that more radical monetary policy could help boost growth.

Keynesian economists, such as the Nobel laureate, Paul Krugman, also subscribe to the idea that more can be done to support growth. For Keynesians debt-financed government spending holds the key. Most Western governments, by contrast, are focussed on reducing debts and trimming public spending. Yet it is a sign of the times that even the fiscally orthodox IMF has recently suggested that the UK government could slow the pace of spending cuts in order to bolster activity.

Outright cancellation of government debt or a shift to growth through public spending are very radical options. The current policy consensus rules out such options out and believes that UK growth is likely to be slow and choppy for quite some time to come. As Sir Mervyn King noted last week, "there are no short-cuts to the necessary adjustment in our economy".