George Osborne will to stick to his well-honed script about the risks to Britain’s recovery on Thursday, even if, as City analysts expect, official figures show that economic growth picked up sharply in the second quarter of the year.

After a modest 0.3% increase at the start of 2013, which scotched fears of a renewed slide into recession, experts have pencilled in GDP growth of 0.6%, or perhaps even better.

There are signs that this time, rather than other false dawns we have had, we could see some sustained growth, said Chris Williamson, chief economist at data provider Markit.

He added that the calmer situation in the eurozone, with less immediate threat of a full-blown collapse of the single currency, had helped to restore confidence among Britain’s businesses, and tempted them to start hiring and investing again. Our surveys have suggested that workplaces are busier, he said.

The Treasury hopes that after almost three years of bumping along the bottom, an upbeat number would mark the start of a more normal recovery from the deep recession that followed the financial crisis in 2008-09; but the chancellor is likely to repeat his message that many risks remain. No one’s thinking it’s going gangbusters, said a Treasury source.

If the GDP numbers are as good as expected, Labour, which had won economic credibility with the argument that the government’s aggressive austerity measures were hampering recovery, is likely to revert to pointing out that with wage growth still very weak, very few families are feeling the benefits of an upturn.

Chris Leslie, the shadow financial secretary to the Treasury, said, City forecasters are expecting growth of up to 0.8% this quarter and, after three years of flatlining, it’s about time we had some growth in our economy. But with living standards still falling and the IMF warning we are a long way from a strong and sustained recovery the chancellor should be acting to ensure we catch up all the ground we have lost over the last few years.

He added that to lift the economy to where the Treasury had expected it to be by the end of the parliament, growth would need to be an almost unimaginable 5.3% a year over the next two years.

The opposition is also likely to question whether the government has succeeded in bringing about the hoped-for rebalancing, away from debt-fuelled consumption and towards a Britain that can pay its way in the world.

Recent retail sales figures have been strong. suggesting that shoppers are returning to the high street, and signs of life in the housing market – partly driven by the government’s controversial Help to Buy scheme – may also have helped to boost confidence.

Meanwhile, official figures have suggested that manufacturing, which the coalition hoped would be at the heart of a more balanced economic model, is struggling to gain traction .

Nicola Smith, head of economic and social affairs at the TUC, said: This will be very welcome: it’s long awaited; but it’s still very delayed relative to the recovery from previous recessions, and to the rates of growth the government was expecting. She added that wages have been falling in real terms for the longest period since the 19th century.

Further evidence of a sunnier economic climate comes on Wednesday in the annual report from UK Trade and Investment, the government’s trade promotion arm. It shows an 11% jump in the number of overseas investment projects in 2012 – which UKTI claims created almost 60,000 new jobs, and helped to safeguard 110,000 more.

The UK has received a major vote of confidence from foreign investors confirming that the UK remains a world leading business destination, said Lord Green, who will retire at the end of 2013, to be replaced by Ian Livingston, of BT.

The data, which were partly compiled from an analysis by the UN’s trade and investment arm Unctad, show that the UK accounted for 4.6% of global foreign direct investment flows in 2012, up from 3.1% in 2011. The US remains by far the largest owner of investment projects in the UK, with a total portfolio worth 204bn.

Lee Hopley, chief economist at manufacturers’ group the EEF, said: The UK has been punching above its weight in attracting overseas investment over the past year, suggesting that reforms to improve the competitiveness of the tax system and our ability to capitalise on strengths such as the science base and flexible labour markets place the UK high up the rankings for investors around the world. The ability to access European markets will also have been a factor in many of these decisions.

UKTI said all regions of the country had seen an improvement since 2011, and there had been particularly strong growth, of 84%, in inward investment projects related to research and development.