The UK economy expanded more than expected in February, with official data from the Office for National Statistics (ONS) showing a 0.5% rise in GDP—far exceeding economists’ forecasts of 0.1%. The unexpected growth was largely driven by a strong performance in the services and manufacturing sectors.
According to the ONS, sectors such as computer programming, telecommunications, and car dealerships saw notable gains, contributing to the overall economic boost. Manufacturing also rebounded, with notable improvements in electronics and pharmaceuticals. The automotive industry, which has struggled in recent months, also showed signs of recovery.
“This growth reflects strength in key service areas and a pickup in some core manufacturing sectors,” said Liz McKeown, director of economic statistics at the ONS.
The positive figures come as the UK economy braces for headwinds from new US trade tariffs. British exports to the US will now be subject to a blanket 10% import duty—part of wider global trade tensions—which analysts warn could hinder future growth and impact key sectors, including manufacturing and automotive exports.
Chancellor Rachel Reeves welcomed the figures as an “encouraging sign” but cautioned against complacency. “We must go further and faster to kickstart economic growth, provide security for working people, and put more money in their pockets,” she said. She added that the government remains focused on securing a trade deal with the US to mitigate tariff pressures.
The ONS also revised its January GDP estimate from a contraction of 0.1% to flat growth, further improving the economic outlook for the first quarter of 2025. However, economists remain cautious about the sustainability of the recovery.
Ruth Gregory, deputy chief UK economist at Capital Economics, warned that February’s strong figures may not signal a lasting trend. “The big picture is that the economy has grown in only four of the last nine months. With higher taxes, rising energy and water bills, and new US tariffs kicking in, growth is likely to falter in the months ahead.”
Businesses, too, are feeling the pressure. Mitchell Barnes, who runs a 3D printing firm in Warwickshire supplying parts to the automotive industry, says domestic cost pressures are his primary concern. “It’s not the Trump tariffs that are hurting us the most—it’s changes to National Insurance and minimum wage laws,” he said.
Barnes had plans to grow his workforce from 27 to 100 over the next 18 months, but has since scaled that back to just 30–40. He now plans to accelerate US expansion to sidestep local cost increases. “Ultimately, for us, it’s all about innovating in order to control our own destiny,” he added.
While February’s figures offer a brief reprieve, analysts agree that the UK economy faces significant challenges ahead, with global trade tensions and domestic policy shifts shaping the path forward.
