CRITICAL figures to be released this morning will reveal whether the UK economy has rebounded from a shock decline and is tough enough to withstand the Government’s severe spending cuts.

Economists expect gross domestic product (GDP) – a broad measure for the total economy – to have grown by anything from 0.2% to 1.2% in the three months to March, following the surprise 0.5% contraction in the final quarter of 2010.

But analysts have warned anything less than 1% will be disappointing, and the figures are likely to show average growth over the last two quarters was broadly flat.

The figure, released by the Office for National Statistics, is subject to revision but will put the coalition Government’s deficit-busting plans under the spotlight once again, and will indicate if the economy is robust enough to withstand the fiscal squeeze.

Policy-makers at the Bank of England are awaiting the figures to help determine whether the economy is strong enough to withstand an interest rate hike, as inflation remains well above the Government’s 2% target.

The severe weather in December was blamed for the unexpected reversal in GDP in the three months to December, though activity would have been flat without the Arctic conditions.

The weakness raised doubts over the timing and size of Chancellor George Osborne’s £81bn package of spending cuts, and the VAT hike from 17.5% to 20%.

Today’s figures are a preliminary estimate, which have been heavily revised in the past, and do not include the expenditure side to the economy.

But a weak period for the construction sector and industrial production, coupled with modest growth for the powerhouse services sector, means growth in the first quarter is likely to be muted.

Howard Archer, chief UK and European economist at IHS Global Insight, has forecast growth of 0.6% to 0.7%.

He said: “While at first glance this looks a decent performance, in actual fact it would represent a far from dynamic performance, after weather-influenced contraction of 0.5% in the fourth quarter of 2010.

“Just as the fourth quarter 2010 contraction overstated the economy’s weakness, so will growth in the first quarter of 2011 highly likely overstate its strength.”

The majority of the Bank of England’s Monetary Policy Committee, who voted in favour of holding interest rates at historic lows of 0.5% earlier this month, want to see how the economy has fared before tightening monetary policy.