Chancellor George Osborne has pledged to insulate the UK from the Greek crisis as European shares took more punishment.
Osborne was speaking in response to figures showing a faster UK recovery at the beginning of the year, with quarterly growth between January and March upgraded to 0.4%.
The Office for National Statistics also said the economy expanded by 3% last year, up from the 2.8% estimated earlier.
The better economic news gave a modest fillip to shares but London’s FTSE 100 was still on the back foot as traders responded to uncertainty in Greece by hitting the sell button.
Business news in pictures - June 30
Shares across major markets were down around 1% as Greece’s banks remain shut and Athens prepares for a referendum on the demands of its international creditors.
The Chancellor said: “We will take whatever further steps are needed to protect the UK from the new risks we see to our economic security.”
Sterling ticked higher on the revised growth figures, which also indicated much stronger business investment than estimated, up 2% in the quarter and 5.7% ahead of a year earlier.
Household disposable incomes are growing at their fastest rate since 2001, helped by record low inflation, although shoppers are digging into their savings to fund spending after the share of income put aside dropped sharply from 5.9% to 4.9% during the first quarter.
The UK’s current account deficit, which includes the trade balance, earnings on foreign investments and cash transfers in and out of the country, improved slightly but remains worryingly high at £26.5 billion, or 5.8%, of GDP.
