"The stronger-than-expected GDP rebound in February and positive data for the three months are welcome news. There was an encouraging story from both the services and manufacturing sectors"
- Stuart Morrison - British Chambers of Commerce
GDP grew by 0.5% during the month, according to this morning's figures from The Office for National Statistics (ONS). Economists had expected it to rise 0.1% month-on-month.
Liz McKeown, director of economic statistics at the ONS, said: "Within services, computer programming, telecoms and car dealerships all had strong months, while 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 and industries."
Despite to good news, including that the 0.1% contraction in January has now been revised to flatlining, economists are warning the outlook remains uncertain, fueled by the as-yet-unkown impact of fresh US tariffs under President Trump.
Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “The stronger than expected GDP rebound in February, and positive data for the three months, are welcome news. There was an encouraging story from both the services and manufacturing sectors.
“However, businesses across the UK are under no illusion - significant sustained growth continues to remain elusive.
“Events of recent weeks will have substantially changed the growth picture going forward. Businesses are now facing the double-edged sword of rising domestic costs, including the national insurance rise, and growing global trade uncertainty. However, it will be several months before we see the real impact on economic data.
“In the search for growth, much will hinge on the upcoming industrial strategy. We also need to see urgent action by ministers on business rate reform, infrastructure and export support. The government should be doing all it can to help businesses navigate the choppy waters both at home and abroad.”
Nicholas Hyett, Investment Manager at Wealth Club said: "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. That could have caused UK economic growth to go extinct - making today's numbers a fossilised window into a lost world."
Richard Pike, chief sales and marketing officer at Phoebus Software, says: “News that GDP is estimated to have grown by 0.5% in February 2025, with growth in all main sectors, is a welcome surprise given the headwinds the UK economy has been facing. With independent forecasts for 2025 GDP growth hovering around just 1.1%, and many analysts revising their predictions downward due to rising business taxes and softer global demand, this is an unexpected but positive development.
“The resilience is particularly striking in the context of recent global pressures, not least the new US tariffs, which prompted KPMG and others to downgrade their UK growth forecasts. Although Trump announced on Wednesday a 90-day pause to the tariffs, which will provide some respite, the ongoing uncertainty and turbulence are unsettling for the market.
"While it’s too early to tell whether this growth marks the start of a more sustained recovery, it will certainly be interesting to see how this data impacts the Bank of England’s next interest rate decision.”
