UK economy grows a robust 0.5% in February, beating expectations

The monthly gross domestic product growth was the strongest since March 2024 and beat all forecasts in a Reuters poll of 30 economists

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Britain's economy returned to growth with a strong expansion of 0.5% in February, official data showed on Friday, beating economists’ expectations and showing it was on a slightly firmer footing as it braces for the impact of US tariffs.

The monthly gross domestic product growth was the strongest since March 2024 and beat all forecasts in a Reuters poll of 30 economists, which had pointed to a 0.1% rise. Previous January data showing a small contraction was revised up to show zero growth.

Compared with a year earlier, GDP was 1.4% higher, also beating expectations.

Finance minister Rachel Reeves called the data “encouraging” but there was little reaction in sterling to the surprise growth. Markets are far more focused on US President Donald Trump's tariffs which BoE Deputy Governor Sarah Breeden warned on Thursday would have a “chilling effect” on output.

"February’s figures have been pushed firmly into the background by the financial market bedlam caused by Trump's tariff announcements,” said Suren Thiru, economics director at the ICAEW accountancy body.

In March, government budget forecasters halved their 2025 forecast for Britain's economic growth to 1%, which would follow a lacklustre 1.1% last year. The forecasters saw a stronger performance of 1.9% in 2026.