The British economy has returned to pre-recession strength earlier than was anticipated, suggesting it may not have been as bad as first feared.

New data from the Office for National Statistics, using new rules which come into force later this year, show an improvement of more than 1% on previous estimates.

Instead of shrinking by 5.2%, the gross domestic product in the UK dropped by 4.1%, while the rulings also incorporate illegal activities which impact upon the economy such as prostitution and drug dealing.

New GDP figures are not due until September but estimates based on the last available figures suggest an economy that is as much as £65bn larger than previously thought.

Not getting carried away with growth rates

As such, it is believed that the economy passed pre-crisis strength in the last quarter (April – June) but critics have warned the population not to celebrate too early.

“The revisions do not change the big picture,” said Rob Wood, chief economist at German bank Barenberg.

“The recession was still huge even if it has now gone from perhaps 10 to 9.9 on the Richter scale.”

Growth rates in the UK have been very impressive in 2014 and several forecasters have upgraded their outlook accordingly – including the International Monetary Fund.

Forecasts improve alongside strong pound market

Credit ratings agency Fitch has now become the latest to alter its forecasts, suggesting growth of 3% in 2014, up from estimates of 2.5% in March.

The situation is highlighted further by the relative weakness of the US economy, which has provided plenty of speculation as to when the Bank of England will increase interest rates.

This helped to develop the strength of the pound against other major currencies, including the dollar and the euro, meaning British holidaymakers can get more value for their money.

Optimism in the UK regarding the country’s outlook is also up, but financial management remains a focus for many people.

Keeping an eye on available funds

Managing available funds is extremely important, so keeping spending in check with a prepaid card is a great way of ensuring you don’t spend more than you would like.

A prepaid card limits spending to the amount on the card at any given moment and is not directly linked to a bank account, which makes funds safer.

The cards can easily be topped up or replaced if required, while accounts can be checked regularly online if needed.

They can then essentially be used in a similar way to a debit or credit card for payments both in stores and online, as well as for withdrawing cash from ATMs across the country.