On Tuesday the Office for National Statistics (ONS) released economic growth figures for the first three months of 2014. The result, a 0.8% increase, was welcomed by politicians of both sides of the political spectrum, and further cemented the claim that the coalition’s long-term economic plan is working.

Indeed, on the face of it, this appears to be the case. The growth in gross domestic product (GDP) was faster than the 0.7% increase in the final three months of 2013, and marked a fifth consecutive quarter of economic expansion. Furthermore, the UK economy is now 3.1% larger than it was in the same period last year.

More importantly, however, the growth in the economy looks to be more balanced. Services, which make up over three-quarters of the UK economy, grew 0.9% and output from manufacturing increased by 1.3%. Construction also expanded, albeit by just 0.3%.

While all this sounds very positive, there is still some way to go before George Osborne can claim success. Output is still 0.6% below the level just before the recession and there are important questions to be asked about the nature of the recovery.

Much of the recent good news is down to the Bank of England, which has been keeping interest rates in the UK at a record low. While this boosts consumer spending and business investment, it also encourages debt. As we know from the 2007/08 Financial Crisis, a credit-fuelled boom is not a sustainable one and can have catastrophic consequences when the central bank decides to ‘take away the punch bowl’.

Loose monetary policy combined with the Government’s ‘Help to Buy’ scheme has also created a bubble in the housing market. House prices, most notably in London, are soaring to record high levels as demand outstrips supply. The government must make the necessary supply-side reforms by changing the country’s planning laws in order to allow more homes to be built on unused land.

Although Ed Ball’s obsession with the ‘cost of living crisis’ is beginning to sound like a broken record, he highlights a problem the government is yet to resolve. Wages may finally be overtaking inflation but in the key areas of housing, energy and childcare, the costs are still causing significant damage to people’s disposable income. The government must address these problems before the recovery can have a substantial impact on families’ standard of living.

Tuesday’s data does suggest Britain’s economic woes are coming to an end. However, the Chancellor would be wise to postpone the celebrations and continue implementing important structural reforms otherwise this recovery will be over before he knows it.