THE UK economy grew faster than expected in February, as the services and manufacturing sectors picked up after recent slow activity, official figures show.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.5%, surprising economists who had forecast no economic growth.
It also marks a significant monthly improvement after no growth in January, the ONS added.
The figures come as a surprise boost for Labour and Chancellor Rachel Reeves, after the party made growing the economy its key priority since winning the election last year, but momentum has been slow amid falling consumer confidence and rising inflation.
ONS director of economic statistics Liz McKeown said: “The economy grew strongly in February with widespread growth across both services and manufacturing industries.
“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.
“Across the last three months as a whole, the economy also grew strongly with broad-based growth across services industries.”
Chancellor Rachel Reeves welcomed the change, but urged caution.
“These growth figures are an encouraging sign, but we are not complacent,” she said. “We must keep going further and faster on our Plan for Change.
“The world has changed, and we have witnessed that change in recent weeks. I know this is an anxious time for families who are worried about the cost of living and British businesses who are worried about what this change means for them.
“This Government will remain pragmatic and cool-headed as we seek to secure the best deal with the United States that is in our national interest. At the same time we will be relentless in our work to kickstart economic growth, provide security for working people and renewal for Britain.”
He went on: "GDP data often feels a bit dated by the time it's published – the Trump-shaped asteroid that hit markets in the last week means February's data feels practically pre-historic.
“Nonetheless the picture it paints is a rosy one, as output grew across all three major sectors. The manufacturing sector grew rapidly, while consumer services also show signs of healthy progress.
“Overall growth of 0.5% in a month is genuinely impressive, far faster than either the market or we had expected, and in the absence of disruption would have been a sign the UK economy was evolving nicely.
“Unfortunately a lot has changed since February. Higher living wage and National Insurance expenses kicked in in April, though these numbers suggest they may not have been the headwind to growth we had anticipated, and perhaps more importantly Donald Trump has upended the global trade system.”
David Morrison, a senior market analyst at Trade Nation, explained: "Monthly GDP is estimated to have grown by 0.5% in February with growths seen across all main sectors. This comes after seeing no growth in GDP in January. Production services saw the largest growth at 1.5%, with construction seeing a 0.4% growth and services 0.3%.
“Finally there’s some good news for UK Chancellor Rachel Reeves. But it’s also the case that one number doesn’t make a trend. The outlook for the UK economy remains downbeat, with the added uncertainty of the effects of Trump’s watered-down tariffs.
“Amid the ongoing tariff chaos, the market reaction to the better-than-expected data was understandably muted. Sterling briefly spiked higher, while the FTSE 100 futures added to gains as they followed the overnight rally in US stock index futures."
The Conservatives claimed the Government still had a “long way to go” on growing the economy.
Mel Stride, the shadow chancellor, said: “Since coming to office, Labour’s choices have killed growth stone dead and there is still a long way to go to recover.
“At the emergency budget, the forecasts for growth, inflation and borrowing all moved in the wrong direction because of Labour’s decisions.
“Hardworking families deserve better than a Government crowing about sluggish growth whilst they will be £3500 worse off because of the jobs tax.”
