UK economy grows 0.5% in February, beating expectations

LONDON: Britain’s economy grew at a monthly pace of 0.5% in February, figures from the Office for National Statistics showed on Friday, well above economists’ expectations in a Reuters poll for an expansion of 0.1%.

Gross domestic product in February was 1.4% higher than a year earlier, the ONS said, also above economists’ expectations for a 0.9% rise, while an initial estimate that output fell 0.1% in January was revised to show no change from December.

Growth in February was broad-based across services and manufacturing, the ONS said.

UK slashes growth forecast, cuts public spending

Britain’s economy grew by a lacklustre 1.1% last year. Last month government budget forecasters halved their 2025 forecast to 1%, though they see stronger performance of 1.9% in 2026.

However, these forecasts have been thrown into doubt by President Donald Trump’s announcement last week of sweeping tariffs on U.S. imports.

The tariffs raise the cost of most British exports to the United States by at least 10% and more than double the cost of imports from China.

“UK GDP growing above expectations in February provides some hope that the economy may have seen a solid expansion over the first quarter, following a soft patch in the second half of last year.

However, underlying momentum in the private sector remains feeble,“ said Martin Sartorius, principal economist at the Confederation of British Industry.

Even before the tariff announcement, Britain and other European economies had slowed due to worries about U.S. trade policy.

British businesses also said they were reining in hiring and investment plans due to a big rise in employment taxes and the minimum wage that took effect this month.

However, there had been some signs that weak consumer spending had been starting to pick up as wage growth continued to outstrip inflation and retail sales beat economists’ expectations in February.