US recovery accelerates as economy grows by 1.7pc in second quarter The figure far outstripped analysts" forecasts of around 1pc GDP growth, and immediately boosted the dollar against the pound. It also marked a sharp improvement from the first quarter, when the US economy grew the equivalent of 1.1pc a year. However, that figure was advised down from an earlier forecast of 1.8pc, raising expectations that the second quarter figure could also be revised downwards later on. America's stronger-than-expected second quarter performance will fuel concerns that the US Federal Reserve will begin winding back its $85bn-a-month quantitative easing (QE) programme in the next couple of months, effectively turning off the tap of fiscal stimulus which has helped to spur America's rapid recovery. Ben Bernanke, chairman of the Fed, has said a number of times that it will start tapering QE before the end of the year if data shows that the US economy is continuing to recover well, as expected, and could stop it altogether by the middle of next year. Many economists predict tapering will start as early as September. Investors are bracing themselves for an announcement from the Federal Open Market Committee (FOMC) this afternoon, following nearly two days of meetings to discuss its fiscal policy. Peter Cardillo at Rockwell Global Capital, said the 1.7pc increase in GDP will "increase the debate as to whether or not the Fed will begin trimming sometime in September as opposed to the end of the year or the beginning of the first quarter of 2014. The debate is going to be in favor of those thinking of the September pullback. He added that the figures were a "pleasant surprise," even with the caveat that they could end up being revised downwards at a later date. The growth was fuelled by an increase in consumer and business spending, and a slowdown in the rate at which the US government is tightening its purse strings. The federal government cut spending by the equivalent of 1.5pc a year during the second quarter, whilst state and local governments increased spending for the first time in a year.