GDP rise offers some light but the outlook is still gloomy

In January, Rachel Reeves was being written off for having jeopardised Britain's economy.

- Richard Partington

In January, Rachel Reeves was being written off for having jeopardised Britain's economy. Her tax-raising autumn budget had sapped business investment, spooked the financial markets and put the jobs market at risk.

The latest official figures showing stronger than expected economic growth of 0.5% in February will therefore come as a boost for the embattled chancellor, in a sign the economy was in better health than her critics claimed.

The only problem is, to use a phrase Reeves has grown increasingly reliant on deploying, the world has changed.

In the wake of Donald Trump's "liberation day" tariff announcement, mounting global uncertainty and escalating trade tensions will cast a long shadow over Britain's economic prospects.

It is now probable that the first quarter of the year - when British business leaders had claimed to be slashing jobs at among the sharpest rates since the 2008 financial crisis - will stand as the high point of 2025 for economic activity.