Britain’s economy grew 0.5% in February compared with previous month, official data showed on Friday, recovering from a slight contraction in January. Economists had forecast a more modest 0.1% growth.
The Office for National Statistics (ONS) said February’s growth was broad-based, covering both the services and manufacturing sectors. The economy contracted by 0.1% in January, mainly due to a downturn in the manufacturing sector.
The ONS, which released preliminary data, said a 0.3% rise in the services sector contributed to the unexpected jump in economic growth. In January, the services sector posted a monthly growth of 0.1%.
The British pound rose about 0.19% on Friday against the dollar to 1.29 while the FTSE 100 stock index jumped 3%.
February’s performance may represent the last period of growth before fears of a global trade war start to weigh on business investment and consumer spending.
Households face sharp rises in utility bills and council tax this month, while employers are dealing with £25bn worth of tax rises.
The UK economy is set to grow by 1.1% in 2023. In March, government budget forecasters cut their 2025 growth forecast to 1% from 2%, although they expect a stronger 1.9% in 2026.
However, those forecasts have been called into question following President Donald Trump’s announcement last week of comprehensive tariffs on US imports. The measures 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.
