The UK economy grew by 0.5% in February, according to the Office for National Statistics (ONS) – a much stronger result than the 0.1% growth predicted by City economists. January’s figure was originally reported as a 0.1% decline but was also revised to flat growth.
All major sectors contributed to the increase, with manufacturing showing a notable recovery after a prolonged slump. Industrial production rose by 1.5% monthly, driven by growth in metals, transport equipment and pharmaceuticals.
The services sector also expanded by 0.3%, with consumer-facing services up 0.7%, marking a fourth consecutive month of growth. Travel agents and tour operators saw an 8.1% boost in revenue over the three months to February, reflecting a rise in household holiday spending.
Construction rebounded after a poor January, suggesting that government initiatives to support housebuilding may be gaining traction. Strong performance from tech sectors and car dealerships supported overall growth within services.
However, economists warn that this momentum may not last. The global economy faces fresh headwinds from US president Donald Trump’s tariff measures, which began in earnest last month and could dampen business investment. Some analysts suggest the February surge in manufacturing may reflect companies rushing to import before tariffs hit.
Meanwhile, rising living costs and a £25bn tax burden on employers could weigh on growth in the coming months. Despite improving consumer confidence, many households remain under pressure from persistent inflation and higher utility and council tax bills.
Officials welcomed the figures but urged caution going forward.
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