Britain’s economy posted the strongest growth in almost a year in February — before Donald Trump’s wave of tariffs brought turmoil to global markets and stoked recession fears.
Gross domestic product rose 0.5% after a stagnant January, itself revised up from a previously estimated 0.1% decline, the Office for National Statistics said Friday. It was well above the 0.1% gain predicted by economists, with all the main sectors posting increases.
While the figures are a major boost for the Labour government and put the economy on course for a positive first quarter, the respite could be fleeting as the White House started to upend the global economic order with a slew of tariff announcements in March and April.
The gains were driven by 0.3% growth in the services sector and a shock 2.2% surge in manufacturing production, well above the 0.2% expected by economists. Almost every manufacturing sector increased output.
“Within services, computer programming, telecoms and car dealerships all had strong months, while in manufacturing, electronics and pharmaceuticals led the way and car manufacturing also picked up after its recent poor performance,” said Liz McKeown, ONS director of economic statistics. “Across the last three months as a whole, the economy also grew strongly with broad-based growth across services industries.”
The figures put GDP on course for growth in the first quarter as a whole, as forecast by the Bank of England, the Office for Budget Responsibility and private-sector economists. The ONS said the economy will avoid a contraction unless output falls by 2.1% or more in March.
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The UK economy is now 0.9% bigger compared to when Labour arrived in office after winning a landslide victory in last summer’s election. The government has struggled to accelerate growth but the economy finally began picking up speed just before the White House’s sweeping tariffs threatened to derail global growth.
While the US President decided to pause most of his tariff hikes on Wednesday, Britain’s economy is still facing an uncertain outlook as the world economy weakens and confidence is sapped by see-sawing markets.
The turbulence comes at a delicate moment for the Labour government which is scrambling to boost the economy’s lackluster growth rates after years of stagnation.
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The economy has worsened since it took office despite its efforts to unblock building projects and lift public investment. Last month the OBR halved its growth forecast for 2025 to 1%, in line with private sector projections.
Bank of England rate-setters also expect growth to be dragged down by the tariffs with speculation mounting over a quicker easing from the UK central bank.
Investors have ramped up bets on more interest-rate cuts from the BOE, though those wagers retreated on Thursday in response to Trump’s tariffs pause. Markets expect three more quarter-point reductions by the end of the year.
