The UK's economy grew by 0.5% in the third quarter of 2011, official statistics showed on Tuesday morning.
The figures were higher than expected growth of 0.4% and an increase from the second quarter - in which the economy grew by 0.1%.
George Osborne is due to face MPs in the House of Commons this afternoon where he is likely to be grilled on the growth figures and the Greek referendum.
On Monday David Cameron said the coalition would not deviate from its deficit reduction plan, despite slowing growth and growing unemployment.
Writing in the Financial Times the prime minister said the government will instead focus on infrastructure investment and “credit easing” in order to restart the economy.
Yet the FTSE 100 has plunged by 2.2% following news that Greece plans to hold a referendum on a proposed eurozone bail out.
European markets also reacted badly to the surprise move, with the the Germany's Dax falling by 3.5% , the Cac-40 in Paris by 3.4% and the stock market in Athens plunged by 7%.
The decision by Greek Prime Minister George Papandreou to hold a referendum is reported to have shocked eurozone leaders, who last week agreed to cut Greece's debts by 50% and hand over £112bn more in rescue loans.
Papandreou said: "We have faith in our citizens, we believe in their judgment and therefore in their decision".
"All the country's political forces should support the [bail-out] agreement. The citizens will do the same once they are fully informed."
The precise date of the poll is yet to be announced, but it is expected to be held in January. There have been widespread and violent protests in Greece over the austerity measures imposed on the country by its government.
See below for a slideshow of political reaction to the growth figures.